FORMED AND STARTED OPERATIONS IN 1988. ESTABLISHED BY THE KUMHO ASIANA GROUP AS PART OF THE SOUTH KOREAN GOVERNMENT'S POLICY TO CREATE A SECOND FLAG CARRIER, AND ORIGINALLY KNOWN AS SEOUL AIR INTERNATIONAL. THE SOUTH KOREAN GOVERNMENT HAS APPROVED THE RAISING OF THE LIMIT SET ON FOREIGN OWNERSHIP OF THE AIRLINE FROM 20% TO 50%. DOMESTIC & INTERNATIONAL, SCHEDULED & CHARTER, PASSENGER & CARGO, JET AIRPLANE SERVICES.

JANUARY 1997: ENGINEERING GROUP IS CONSOLIDATED UNDER LEE BONG-IL, GENERAL MANAGER ENGINEERING. J J YOON, PRESIDENT KUMHO GROUP.

WAS SCHEDULED TO RETURN 5 737'S, TO LESSOR IN 1997, BUT WILL INSTEAD EXTEND LEASE ON (PW009), & NEGOTIATING EXTENSION ON ANOTHER. 737 FLEET WILL INCREASE TO 26, BY END OF 1997. 1 737-400 (PV227) DELIVERY. (PW011) RETURNED TO (GUI). SELECTS (CF6-80C2) FOR 3 747-400'S, & 2 767-300'S, DUE IN 1998.

FEBRUARY 1997: APPROVAL FOR CHICAGO (ORD) ROUTE.

1 737-400 (PV228) DELIVERY, RETURNED (PW013) TO LESSOR.

MARCH 1997: WINS NEW ROUTES TO ISTANBUL, AND NEW DELHI.

1 737-400 DELIVERY (PV206) (NOW 23 AIRPLANES).

APRIL 1997: NEW CARGO ROUTE TO CHICAGO (ORD), & NEW YORK (747-400F) = NOW 13 INTERNATIONAL CARGO ROUTES.

INCHON INTERNATIONAL AIRPORT (ICN) OPENS. ASIANA AIRLINES (AAR) RELOCATES ITS INTERNATIONAL AND CARGO OPERATIONS, TO INCHON, INCLUDING A LIMITED NUMBER OF DOMESTIC FLIGHTS. MOST DOMESTIC OPERATIONS ARE STILL FROM KIMPO.

In 3/03, will become the 15th member of the Star (SAL) Alliance. Begun in 1997, Star Alliance's 14 members boasted 11,000 daily departures, service to 124 countries, and 729 airports, a fleet of 2,088 airplanes, and 292M passengers, carried in 2002. Asiana Airlines (AAR) was welcomed by Jaan Albrecht CEO. (AAR) currently serves a network of 18 domestic, and 53 international routes with a young fleet of 65 airplanes, with 139 departures daily to 15 countries. In 4/03, Spanair (SPP) will become Star (SAL) Alliance's 16th member, followed by (LOT) Polish for 17.

March 2003: 15th anniversary!

Long term, heavy maintenance contract to (AMECO) (BEJ) to perform 8 "S4C"/"S8C" checks and strut modifications on its 767-300ER fleet.

An intnl court jury ruled that Asiana Airlines (AAR) had to pay $16.6 Million in damages to Evergreen International (EVR) for breaking a contract to fly an (EVR) wet-leased 747-200F for 3 years.

November 2003: Japanese Ministry of Land, Infrastructure & Transport permits daily charter service between the capitals Tokyo (Haneda) and Seoul (Kimpo), by 4 airlines: (JAL) Group & All Nippon Airways (ANA) from Japan, and Korean Air (KAL) & Asiana Airlines (AAR) from Korea.

GAMECO (GUN) has a contract with Asiana (AAR) to perform lease-return checks on 5 737-400's starting this month and the rest being completed within the next 18 months. (GUN) has provided component repair and line maintenance services in the past. 737-4Q8 (26308) returned to (ILF).

Singapore Airlines (SIA) and Asiana (AAR), both members of the Star Alliance, have begun code sharing between Singapore and Seoul. (SIA) is putting the SQ code on 10 weekly A330 services operated by Asiana (AAR), while the latter is putting the OZ code on 44 weekly 747 and 777 services operated by (SIA). Subject to regulatory approval, the carriers expect to extend their cooperation to include transpacific flights beyond Seoul, domestic destinations in South Korea, intra-travel in north Asia and flights beyond Singapore.

November 2005: All Nippon Airways (ANA) will move into the new South Wing of Narita Airport Terminal 1 in June 2006, along with fellow Star Alliance members Air Canada (ACN), Asiana Airlines (AAR), Austrian Airlines (AUL), Lufthansa (DLH), Scandinavian Airlines (SAS), Singapore Airlines (SIA), Thai International (TII), United Airlines (UAL), and Varig (VAR).

Asiana Airlines (AAR) will operate 3 additional flights from Seoul to Saipan from December 23rd through March 1st. The flights will depart on Mon/Wed/Fri and be operated with an A321. This is in addition to daily service provided with a 777-200. (AAR) is increasing capacity on routes to the Philippines by upgrading the afternoon flight from Seoul Incheon to Manila to a 777 while evening flights to Clark Airfield and Cebu City are upgrading to a 767.

December 2005: Asiana Airlines (AAR) said it will place cabin staff on Turkish Airlines (THY) airplanes on its 2x-weekly codeshare flights between Incheon and Istanbul. 2 Asiana (AAR) flight attendants will work each flight to "provide more convenient service to Korean passengers who make up 80%" of the route's traffic. (AAR) added, "such attendant detachment is a unique kind of cooperation in the worldwide airline industry."

A330-323 (708, HL7741), delivery.

February 2006: Asiana Airlines (AAR), who operate a daily 777-200 flight from Seoul's Incheon Airport to Saipan, discontinued the additional 3x-weekly A321 flights, it started operating recently, due to low passenger numbers on these flights. The airline will also downgrade equipment on the route from Mar 26th to 4x-weekly A321 and 3 weekly 767 flights.

747-48EF (29907, HL7604), delivery.

March 2006: All Nippon Airways (ANA) said it concluded a cargo code share agreement with Star Alliance partner Asiana (AAR) to take effect April 1. It covers 18 weekly flights, 10 operated by (ANA), 8 by Asiana (AAR), between Japan and Korea and is the 1st such accord between the 2 countries.

777-28EER (29171, HL7742), delivery.

April 2006: Asiana Airlines (AAR) earned +KRW41.26 billion/+$45.4 million in the first quarter ended March 31, a +28.9% rise over the year-ago period when it earned +KRW32 billion. According to wire service reports, the higher net profit occurred despite a -4.1% decline in operating profit to +KRW16.6 billion that (AAR) attributed to a +37.6% jump in the price of fuel. Operating revenue grew +9.1% to KRW796 billion.

South Korea and Thailand agreed to liberalize passenger services between the 2 countries. Cargo operations already are liberalized under a 2004 accord. The new agreement comes as the limit of 42 weekly flights previously allowed by each nation's airlines is under strain, with load factors reported at 88% LF.

June 2006: In what All Nippon Airways (ANA) President & (CEO) Mineo Yamamoto described as a "great day for (ANA) and the Star Alliance (SAL), and the dawn of a new age" for air travel in Japan, 10 of the 11 (SAL) airlines serving Tokyo Narita begin operating today from co-located facilities in the airport's Terminal 1 South Wing. (SAL) members that moved overnight into the newly rebuilt terminal are (ANA), Air Canada (ACN), Asiana Airlines (AAR), Austrian Airlines (AUL), Lufthansa (DLH), (SAS) Scandinavian Airlines, Swiss International Air Lines (CSR), Singapore Airlines (SIA), Thai Airways (TII), and United Airlines (UAL). Air New Zealand (ANZ), which has a code sharing relationship with Japan Airlines (JAL), remains in Terminal 2.

Bringing the carriers under one roof will result in international-to-international connecting times being reduced more than -50% from 110 minutes to 45 minutes and create "huge opportunities" to develop domestic connections with (ANA), according to (SAL) (CEO) Jaan Albrecht. In total, the 10 airlines offer more than 794 weekly flights to 30 destinations in 15 countries from Narita.

Among the many 1sts in the spacious and attractive South Wing, are common "zone check-in" areas for all carriers save (SIA), with check-in areas organized by class of travel across the airlines. The hall features a record 126 common-use self-service check-in kiosks and common-use check-in desks. (ARINC) is the technology vendor for both.

Travelers on (ANA), United (UAL), Air Canada (ACN) and Austrian (AUL) can use the kiosks, which are equipped with passport readers. By year end, Star (SAL) expects passengers on any of the 10 member carriers to be able to check in via the kiosks. The new terminal also offers curbside check-in, a 1st for Japan, and the country's 1st baggage reconnecting facility for passengers connecting from an international to a domestic flight.

Additional and upgraded premium lounges are part of the package, as is a new pier with 8 attached airbridges. (ANA) has 4 lounges with shower facilities, which it claims is a 1st for a Japanese carrier. Its domestic arrivals lounge also is equipped with showers.

This is the 3rd and largest "Move Under One Roof" exercise for (SAL). Last year, it brought carriers at Paris Charles de Gaulle T1 together and (SAL) members at Centrair near Nagoya also are co-located.

(AAR) inaugurated nonstop service from Seoul Incheaon to Phnom Penh. (AAR) now operates 2x-weekly on Wednesdays & Saturdays, using an A320. Qatar Airways (QTA) and (AAR) signed a code share agreement under which (AAR) will place its code on Qatar (QTA)'s Doha - Seoul flights. (QTA) operates a 3x-weekly service between the capitals via Shanghai. It will add a 4x-weekly flight this summer.

A320-232 (2808, HL7744), delivery.

July 2006: Asiana (AAR) will increase the frequency of its Seoul Incheon to Los Angeles service from 10x- to 12x-weekly. The 2000 Incheon departure operated on Tuesdays, Thursdays, & Fridays will also be operated on Wednesdays & Sundays from July 23rd; the 0020 Los Angeles departure operated on Wednesdays, Fridays, & Saturdays will also be operated on Mondays & Thursdays from July 24th. This service will use a 777 all 5 days.

A320-232 (2840, HL7745), & A330-323X (772, HL7742), deliveries.

August 2006: Asiana Airlines (AAR) was boosted by increased demand, particularly for short-haul travel, and beat soaring fuel costs to post a second-quarter net profit of +KRW16 billion/+$16.1 million, that reversed last year's loss of -KRW8.6 billion. Revenue jumped +12% to KRW843.3 billion and operating profit increased more than sevenfold to +KRW22.2 billion. Fuel costs jumped +KRW49.2 billion for the quarter. Key to the airline's strong performance has been the introduction by many Korean companies of a 5-day work week, which enables many Koreans to take short breaks into Japan and China.

Goodrich (BFG) inked a contract valued at up to $4 million to overhaul landing gear on (AAR) 737, 747, 767, and 777 airplanes.

October 2006: Asiana Airlines (AAR) introduced the 1st airplane showing (AAR)'s new livery. The 777 (HL7597) - see photo. Later, an A320 (F-WWIM) will deliver with the new livery - see photo.

Alteon Training expanded its agreement with (AAR) and will install a 777-200/-300 Full-Flight Simulator (FFS) at Asiana (AAR)'s training center in Seoul by April. In addition, an Asiana (AAR) 737-500 (FFS) will be transferred to Alteon's new center in Singapore.

A320-232 (2943, HL7753), delivery.

December 2006: A330-323X (803, HK-7747, - see photo), delivery in new livery.

January 2006: Asiana Airlines (AAR) reportedly will add both Airbus (EDS) and Boeing (TBC) airplanes to its fleet, but press reports differed on whether the acquisitions involve purchased and/or leased airplanes. (AAR) agreed to purchase 2 777-300ERs, 2 A321-200s, 1 A320-200 and 1 A330-300 and that it is "considering ordering 2 additional planes from the [A320] family this year," according to (AAR). Reuters said the acquisition will comprise 3 purchases (2 777-300ERs and 1 A330-300) and 5 leased A320s/A321s, including the 2 "additional" planes. Both reports said the airplanes will be delivered this year.

May 2007: Asiana Airlines (AAR) will launch Busan - Weihei flights on June 1, bringing the number of Chinese cities it serves to 20. It also reached agreement with the Chinese government to operate a Seoul Gimpo - Shanghai Hongqiao service starting as early as next year, which (AAR) said will save 1 hour of travel time between the 2 cities.

Star Alliance (SAL) partners (ANA) and (AAR) announced a cross-shareholding agreement, that will strengthen their strategic partnership, which includes a codeshare deal announced in February covering 154 flights on 18 routes between Korea and Japan. The deal, 1st mooted in December, involves each carrier taking a $12 million stake in the other, an extension of the codeshare arrangement to cover (ANA)'s Tokyo Narita - Honolulu service beginning July 1, and the creation of a major triangulation route among Seoul Gimpo, Tokyo Haneda and Shanghai Honqiao. The pair also will look into cooperating to reduce costs and improve services at 19 overseas airports served by both, including sharing of spare parts and support during "operational irregularities." Joint purchasing of fuel and joint training will be involved.

June 2007: While China Eastern Airlines (CEA) is on the verge of selling a 25% stake to Singapore Airlines (SIA), Shanghai Airlines (SHA) appears to be interested finding its own foreign investor. (ANA) President & (CEO) Mineo Yamamoto revealed that the Japanese carrier is considering a cross-shareholding arrangement with its future Star Alliance (SAL) partner. Yamamoto said in Tokyo that an arrangement with (SHA) would be similar to the agreement reached with (AAR) last month, under which each carrier took a $12 million stake in the other.

777-28EER (30861, HL7755), delivery.

July 2007: Domodedovo Airport (DME) will build a cargo village and will shortly welcome a new 2x-weekly Asiana Airlines (AAR) 747F service from Seoul.

November 2007: Asiana Airlines (AAR) reported a +KRW36.9 billion/+$40.7 million profit in the third quarter, down -15.4% from the +KRW43.6 billion earned in the year-ago period, according to a regulatory filing cited by "Bloomberg News." Operating profit rose +75% to +KRW80.1 billion, and revenue was up +4.8% to KRW967 billion, as passenger numbers climbed.

A321-231 (3297, HL7763), AerCap (DEA) leased.

February 2008: Asiana Airlines (AAR) will invest KRW23 billion/$24.3 million in start-up Busan International Air (later to become Air Busan (ABN)) and become the managing shareholder of the new carrier with a 46% stake, it announced. Now capitalized to the tune of KRW50 billion, (ABN) will "focus on offering customers low fares, but with the quality service and safety assurance, that is synonymous with Asiana Airlines (AAR)," the latter said. An Asiana (AAR) "taskforce" will begin working on launching service.

March 2008: Beijing Capital International Airport's new $3 billion-plus Terminal 3 opened as Shandong Airlines (SHG) (flight SC1151 arrived from Jinan at 8:39 am. UK architect, Norman Foster claimed it is the largest covered structure ever built - - 3.25 km long and 1.3 million sq m of floor space. Construction began in March 2004. The airport said the 3-concourse facility welcomed (SHG), Sichuan Airlines (SIC), Qantas (QAN), Qatar Airways (QTA), British Airways (BAB), and El Al (ELA). A 2nd move is scheduled for March 26 when Air China (BEJ), Shanghai Airlines (SHA), (SAS), Austrian Airlines (AUL), Lufthansa (DLH), Asiana Airlines (AAR), Air Canada (ACN), United Airlines (UAL), (ANA), Thai Airways (TII), Singapore Airlines (SIA), Finnair (FIN), Cathay Pacific Airways (CAT), Japan Airlines (JAL), Dragonair (DRG), Turkish Airlines (THY), Emirates (EAD), Air Macau (MCU), S7 Airlines (SBR), and EgyptAir (EGP) will transfer to the new building. "Reuters" reported that airport capacity will be boosted to 76 million per year from the 52 million it served in 2007. The baggage system can handle 19,800 pieces per hour, it said.

Later, Star Alliance (SAL) carriers Air Canada (ACN), Air China (BEJ), (ANA), (AAR), Austrian Airlines (AUL), (LOT) Polish Airlines, Lufthansa (DLH), (SAS) Scandinavian Airlines, Shanghai Airlines (SAL), Singapore Airlines (SIA), Thai Airways (TII), Turkish Airlines (THY), and United Airlines (UAL) each completed the transfer of their operations to Beijing International's Terminal 3. The move was part of the collocation plan developed as a result of (BEJ) and (SAL) joining the alliance last year. A similar collocation will be completed at Shanghai Pudong on April 29.

A320-232 (3437, HL7769), (RBS) Aerospace leased.

April 2008: Asiana Airlines (AAR) has bought into planned new airline Air Busan (ABN), in another sign that South Korea may emerge as a major market for low cost carrier (LCC) operations. Asiana (AAR) paid 23 billion won/$24 million for a 46% stake. (ABN) is 1 of several new carriers planned in South Korea. Korean Air (KAL) plans to establish late this year Jin Air (JIN) as a new low cost carrier (LCC) subsidiary, while Singapore-based Tiger Airways (TGR) plans to launch next year, an associate airline in South Korea in partnership with the Incheon government.

May 2008: Asiana Airlines (AAR) will be expanding its joint service with (ANA) to include Japanese domestic routes on June 1, 2008. Through its joint services with (ANA) of Japan, Air China (BEJ) and SH Airline of China, Asiana (AAR) has established the largest Korean/Chinese/Japanese airline network. Under the contract for strategic partnership that the two parties formed in December 2006, Asiana (AAR) and (ANA) have cooperated in all areas, including sales, transportation, purchase, and finance, building the closest partnership of any Korean and Japanese airlines. The cooperative agreement between the 2 companies includes the joint servicing of all Korean and Japanese routes (February 2007), capital alliance (May 2007), and cabin and off-site Human Resources (HR) exchange (October 2007). Both parties also plan to expand joint services to Japanese domestic routes starting in June 2008. The routes jointly-serviced by the two companies will be increased from the current level of 20 international lines (194 round-trips a week) to 294 round-trips a week, including 8 domestic lines in Japan. The newly included routes are: Osaka - Okinawa, Osaka - Fukuoka, Osaka - Matsuyama, Fukuoka - Okinawa, Fukuoka - Osaka (Itami Airport), Sendai - Osaka (Itami Airport), Sendai - Sapporo, and Nagoya - Sapporo.

Asiana Airlines (AAR) will be launching its new services in Sapporo, which had previously not been serviced by the airline, and at Osaka Itami Airport. Services to Fukuoka will be increased from 24 round-trips to 38 round-trips per week. Asiana (AAR)'s services to Okinawa and Matsuyama will increase from 3 round-trips to 31 round-trips, and from 3 round-trips to 17 round-trips, respectively.

In China, Asiana Airlines (AAR) added a new partnership with SH Airlines to its joint service network with Air China (BEJ), China Eastern (CEA), China Southern Airlines (GUN), and Shenzhen Air (SHZ) on May 14, 2008, achieving the most competitive Korean - Chinese airline network, with 304 round-trips a week via 30 routes.

Asiana Airlines (AAR) now provides 598 round-trips per week, via 59 routes to 40 cities through its broad range of partnerships and joint services with the major airlines of China and Japan.

Incheon International (ICN) completed the second phase of its construction and will open the new facilities next month. Upgrades, which took six years to build at a cost of approximately $4 billion, include a new passenger terminal, a 4,000-m runway, that will accommodate the A380 and an automated passenger transport system. (ICN) now will be capable of handling 50 million passengers and 5 million tonnes of cargo per year.

Asiana Airlines (AAR) signed a contract for two 777-200ERs worth $438 million at list prices. (AAR) has an option to upgrade to the 777-300ER and currently operates 9 777s.

Pratt & Whitney (P&W) said (AAR) selected (PW4000-112)s to power 3 recently ordered 777-200ERs in a deal valued at >$135 million. The contract includes installed engines and a long-term service agreement.

(AAR) placed a firm order for 30 A350-XWBs valued at >$7 billion plus 10 options. Deliveries to begin in 2016. (AAR) has been weighing for months whether to place a massive order for A350s or 787s to replace its 767s and A330s, and drive future growth to Japan and China and on long-haul routes. (AAR) said it plans to take all 3 variants of the airplane, adding that it will be used on both regional and long-haul routes. They will be powered by Rolls-Royce (RR) (Trent XWB)s.

Airbus (EDS) said it has sold a total of >350 A350s to >20 customers.

August 2008: Asiana Airlines (AAR) suffered a -KRW19.2 billion/-$18.9 million loss in the 2nd quarter, reversed from a +KRW38 billion/+$37 million profit in the year-ago period as rising fuel costs proved decisive. Gross revenue rose +20.8% year-over-year to KRW1.04 trillion, but operating expenses climbed +30.2% to KRW919.8 billion. Operating income fell to a -KRW17.9 billion loss from a +KRW20.6 billion profit in the 2nd quarter of 2007. During the quarter, (AAR) flew 5.69 billion traffic (RPK)s, up +6.9% year-over-year, against a +10.6% lift in capacity to 7.8 billion (ASK)s. Load factor fell -2.5 points to 73% LF and yield rose +13.7% to KRW92.4. Fuel costs surged +67.3%.

1st-half loss was -KRW15.9 billion compared to a +KRW50.1 billion profit in the year-ago semester.

The South Korean government will sell a 49% stake in Incheon International Airport, "which includes a strategic tie-up with a foreign airport operator to secure international competitiveness," according to "Reuters."

November 2008: Fuel costs and the weakening won combined to drag Asiana Airlines (AAR) to a -KRW47.9 billion/-$36 million loss in the third quarter, reversed from a +KRW37 billion profit in the year-ago period. "The loss in the third quarter can be attributed to higher oil prices and a weaker local currency," the carrier said in a regulatory filing cited by the "Yonhap" news agency. Sales climbed +21% year-over-year to KRW1.17 trillion, but fuel costs surged +83.2% to KRW470.3 billion and currency-related losses rose +59-fold to KRW112.6 billion as the won fell -13% during the three-month period, according to "Bloomberg News." Operating income plunged -70% to +KRW23.7 billion from +KRW80.1 billion last year. 3rd-quarter load factor dropped -1.9 points to 71.8% LF.

Fuel and currency hedges saved (AAR) from a worse result, according to the daily "Chosun Ilbo," which said that the 9-month loss of -KRW63.8 billion would have reached -KRW298.5 billion without the hedge program. (AAR) reported a +KRW87.1 billion profit in the 1st 9 months of 2007.

February 2009: Asiana Airlines (AAR) is awarded Air Transport World (ATW) "Airline of the Year." - - SEE ATTACHED - - "AAR-ATW-1ST-2009-02-A/B/C/D/E."

(AAR) President & (COO) Young Doo Yoon accepted the "Airline of the Year Award." He noted that it was presented on the 21st anniversary of (AAR)'s founding on February 17, 1988. "On behalf of (AAR) it is truly an honor to receive such a prestigious award," he said. He thanked (AAR)'s customers and cited "the dedication of our staff which made it possible for us to achieve this great honor."

March 2009: Korean Air (KAL), Asiana Airlines (AAR), Singapore Airlines (SIA) and Air Canada (ACN) began rerouting flights that normally pass through North Korean airspace after Pyongyang said it was "compelled to declare that security cannot be guaranteed for South Korean civil airplanes flying through the territorial air of our side." (KAL) and (AAR) began rerouting an estimated 15 daily flights that approach South Korea from the east to new flight paths that take airplanes over Japan, adding an estimated 40 minutes and $2,500 in operational costs to each flight. South Korea's Unification Ministry estimated that 33 flights pass through North Korean airspace daily, 18 of which are operated by non-Korean airlines.

North Korea has allowed commercial flights to pass through its airspace since 1998, after >40 years of prohibiting civil flights. According to JoonAng Daily, South Korean carriers submit flight plans to North Korea for each flight that will pass through its airspace and the nation collects an average of $870 for each. The Unification Ministry said 5,260 flights per year use the route, adding that South Korean carriers annually pay nearly $4 million to Pyongyang for airspace access. North Korea's threat was condemned widely. "The military threat against normal operation of civilian airliners under international aviation protocols is in violation of international norms and is inhumane," South Korea's government said. "It can never be justified under any circumstance. The South Korean government urges the North to withdraw its military threat as soon as possible." The USA called the threat "a provocation and unacceptable." Tensions are high on the peninsula, with North Korea stating that it plans to conduct missile tests and South Korea and the USA planning to conduct annual military exercises this week that Pyongyang condemns. The USA and South Korea said they plan to carry forward with the exercises that North Korea cited as the reason for its threat against airlines.

April 2009: Asiana Airlines (AAR), Cargolux Airlines International (CLX) and Nippon Cargo Airlines (NCA) became the latest carriers to reach an agreement with the USA Department of Justice (DOJ) to plead guilty to conspiring to fix air cargo prices and will pay criminal fines totaling $214 million. (AAR), which agreed to pay a $50 million fine, also will plead guilty to "carrying out [an] air passenger price-fixing conspiracy," according to the (DOJ). (CLX) will pay a $119 million fine and (NCA) will pay a $45 million penalty.

15 airlines now have paid or agreed to pay criminal fines totaling >$1.6 billion as a result of the (DOJ)'s ongoing antitrust investigation into air cargo pricing irregularities. (CLX) and (NCA) are the 1st all-cargo airlines to agree to pay the (DOJ) fines. Like (AAR), Korean Air (KAL) also pleaded guilty to fixing passenger fares. Other international authorities also have been conducting investigations and the Australian Competition and Consumer Commission recently commenced legal proceedings against Air France (AFA), (KLM), Martinair (MTH) and Cargolux (CLX).

These plea agreements with the (DOJ) are subject to court approval. Acting Assistant Attorney General Antitrust Division, Scott Hammond said air transport price-fixing has "inflicted a heavy toll on American businesses and consumers. The Department will continue its investigation into this criminal conduct until all co-conspirators are brought to justice."

The (DOJ) said (CLX), (AAR) and (NCA) are charged with participating in meetings with co-conspirators "to discuss the cargo rates to be charged on certain routes to and from" the USA, agreeing on rates to charge and then levying those rates in accordance with the agreements. They also engaged in "meetings, conversations and communications" to monitor and enforce "adherence to the agreed-upon cargo rates," the (DOJ) said. In addition, (AAR) is charged with meeting and communicating with co-conspirators regarding "wholesale and passenger fares to be charged on flights from the United States to Korea" and agreeing to, levying and enforcing agreed-upon fares, the (DOJ) said.

(CLX)'s criminal activity took place from as early as September 2001 to February 2006, (AAR)'s from "at least as early as January 2000 until at least February 14, 2006" and (NCA)'s from "in or about" April 2000 to February 2006, the (DOJ) said.

(CLX) Chairman, Marc Hoffman said that his airline had "cooperated intensively with the (DOJ) and the other authorities throughout the investigation and will continue to do so." He added that the company had "reviewed and reinforced its competition compliance program."

(AAR) said, "Although the fine amount is far less than that of many other airlines, (AAR) is truly sorry to the public and its stockholders for what has happened. (AAR) promises that business practices will adhere to the laws of each and every country it serves regardless of cultural differences."

Asiana (AAR) Cargo has begun serving Halifax with a 747-400F. A weekly flight arrives from New York (JFK) via Anchorage then flies to Brussels and Incheon.

May 2009: Asiana Airlines (AAR) will introduce daily service between Seoul and New York (JFK) with the addition of +2 more flights from May 28. It will use a 246-seat 747-400 Combi on the route. Decision to increase service is owing in large part to "the sharp increase in demand" for seats following commencement of the Visa Waiver Program between the countries.

June 2009: Asiana Airlines (AAR) suffered a -KRW227.17 billion/-$183.5 million loss in 2008, reversed from a +KRW106.26 billion profit the prior year as the value of the won collapsed against the dollar and the Korean economy faltered, and followed that with an even deeper first-quarter loss. The 2008 loss occurred despite a +16.6% increase in revenue to KRW4.22 trillion. Expenses soared +26.3% to KRW3.7 trillion and (AAR)'s operating result swung to a -KRW52.68 billion loss from a +KRW171.61 billion profit in 2007.

In the 2009 1st quarter, its fortunes soured further as it posted a -KRW262.3 million loss, according to Seoul's "JoongAng Daily." The airline was -KRW3.3 billion in the black in the 1st 3 months of 2008. Operating loss was -KRW120.1 billion compared to a KRW34.6 billion operating surplus the prior year on a -5% fall in sales to KRW922.9 billion.

(AAR) said a -8.9% drop in the value of the won hurt demand and foreign exchange losses boosted operating expenses by +11% year-over-year.

July 2009: The South Korean Ministry of Land, Transport & Maritime Affairs said it plans to spend about KRW4 trillion/$3.12 billion to expand Incheon International, enabling it to handle +41% more passengers and +29% more freight by 2015. A 2nd passenger terminal and a new railway line to Seoul will be among the enhancements, according to a statement cited in multiple news reports. Its construction is set to begin in early 2011. Incheon currently has capacity for 44 million passengers and 4.5 million tons of cargo annually.

Canada announced "open skies" agreements with South Korea and New Zealand.

September 2009: (ARINC) said Air China (BEJ), Air Macau (MCU), Asiana Airlines (AAR), Cathay Pacific Airways (CAT), China Southern Airlines (GUN), Dragonair (DRG) and Korean Air (KAL) signed up to use its AviNet Airport wide-area network service, which is available to carriers using its Muse common-use passenger systems.

October 2009: Continental Airlines (CAL) signed code share agreements with 2 more Star Alliance (SAL) members, (ANA) and Asiana Airlines (AAR). (CAL) after officially joining the (SAL) inked code sharing pacts with United Airlines (UAL), Lufthansa (DLH), Air Canada (ACN), and bmi (BMA). (CAL) said that it will start code sharing with (AAR) in December and with (ANA) next year. (AAR) President & COO, Young Doo Yoon said that in the first phase of the agreement, (AAR) and (CAL) will code share on transpacific flights, with the (AAR) code going on (CAL) flights from Tokyo Narita to Newark and Houston, while the (CAL) code will go on (AAR) flights to Seoul Incheon from Los Angeles, Seattle, and San Francisco. Yoon also said the passenger and cargo markets are picking up "and we hope it will continue." The weak South Korean won is boosting traffic from Japanese tourists, who enjoy a stronger yen for shopping, but transpacific traffic remains weak and the carrier is not yet seeing any significant benefit from South Korea's participation in the visa waiver program. "China is still slow," he stated. (AAR) is hoping to launch service to Beijing from Seoul Gimpo but this has to be approved by both governments.

Turkish Airlines (THY) and (AAR) will extend their code share agreement to include (THY)'s network beyond its hub at Istanbul Ataturk and (AAR)'s network beyond Seoul Incheon from October 25.

November 2009: In its 3rd quarter, Asiana Airlines (AAR) had a +$1 million net profit but a -$57 million net loss excluding foreign exchange gains.

December 2009: Asiana Airlines (AAR) will construct a 2nd maintenance hangar at Incheon. The hangar, which will cost KRW1.1 billion/$948,000 to build, will be 63,800 sq m and able to fit 2 747s and 1 767 simultaneously. Construction will begin at the end of 2010 with completion targeted for April 2013.

March 2010: Amadeus signed a Memo of Understanding (MOU) with Asiana Airlines (AAR) to commence an evaluation of its Altea Customer Management System. (AAR) "will set the time lines for their assessment and planning for the future implementation of Altea," Amadeus said. 13 Star Alliance (SAL) members currently use the full system.

777-28EER (35523, HL7791), delivery.

May 2010: Asiana Airlines (AAR) reported 1st-quarter net income of +KRW958 billion/+$83.8 million, reversed from a -KRW2.62 trillion net loss in the year-ago period, on a +27.4% rise in revenue to KRW11.76 trillion.

(AAR) said that "passenger and cargo demand started to recover" in the 2nd half of last year and continued to rebound in this year's 1st 3 months. Expenses increased +1.7% to KRW10.61 trillion. Operating income of +KRW1.15 trillion, reversed from a -KRW1.2 trillion operating deficit last year, marked (AAR)'s "highest [quarterly] operating income in history," it said.

Some 57.6% of its revenue was generated from international passenger services while 27.8% was from cargo and 4.8% came from domestic passenger flying.

First-quarter international passenger traffic lifted +23.5% year-over-year to 6.79 billion (RPK)s on a +7.7% hike in capacity to 8.53 billion (ASK)s, producing a load factor of 79.6% LF, up +10.2 points. "The demand of short-/mid-haul [flights to] China, Japan [and SE] Asia is increasing due to won appreciation and [shrinking] (H1N1) spread," (AAR) said. Its fleet totaled 68 airplanes on March 31.

July 2010: Asiana Airlines (AAR) posted income before taxes of +KWR14.7 billion/+$12.1 million for the second quarter, down -75.5% from a +KRW60 billion pre-tax profit in the year-ago period owing mainly to a -KRW74.3 billion net loss on foreign currency exchange.

But (AAR) suggested it remains in a strong position despite the profit decline, pointing to a year-over-year +46% increase in quarterly revenue to KRW1.24 trillion. (AAR) also earned +KRW178 billion in operating income excluding currency-related losses, reversed from an operating loss of -KRW130 billion in the year-ago period. It noted that pre-tax income for the 1st half was +KRW137 billion, reversed from a loss on the same basis of -KRW253 billion in the year-ago period.

Its full-year 2009 loss was -KRW266 billion (adjusted in March 2010). It did not provide guidance, but (KB) Investment Securities Company predicted "record quarterly earnings in the third quarter thanks to such factors as the summer travel season that will spark a rise in demand for air travel," according to the "Korea Herald."

(AAR) said its international passenger business is on the rise "due to recovery of outbound passenger demand to China, Japan, etc. In addition, easier visa issuance for Chinese [passengers] and [the] visa waiver program to the US have made international passengers grow." International traffic jumped +27.7% year-over-year to 6.54 billion (RPK)s traffic on a +10.2% lift in capacity to 8.5 billion (ASK)s, producing a load factor of 76.9% LF, up +10.5 points. Yield heightened +13.1% to KRW96.8.

(AAR) will launch 4x-weekly, Seoul - Atlanta cargo service aboard a 747-400F on September 13.

October 2010: Asiana Airlines (AAR) reported 3rd-quarter net income before taxes of +KRW203.7 billion/+$184 million, significantly widened from a +KRW900 million pre-tax profit in the year-ago period, as revenue surged +34.1% year-over-year to KRW1.38 trillion.

Operating income was +KRW239.1 billion, reversed from an operating deficit of -KRW29 billion in the 2009 3rd quarter and its highest ever operating profit for a September quarter, according to (AAR). International passenger traffic rose +11.4% year-over-year to 6.94 billion (RPK)s on a +6.9% rise in capacity to 8.88 billion (ASK)s, producing a load factor of 78.1% LF, up +3.2 points. Yield lifted +26.9% to KRW114.

"(RPK)s and yield were record highs [for a 3rd quarter] due to the recovery of outbound passenger demand to China, Japan, etc," (AAR) said in a statement to investors. "In addition, easier visa issuance for Chinese and [the] visa waiver program to the [US] has made international passengers grow."

(AAR) said 61% of its 3rd-quarter revenue was generated from international passenger services, while 24.7% came from cargo, 5.1% from domestic passengers and 9.1% from other sources. South Korea - Japan flights comprise 22.1% of its total passenger revenue, followed by USA service (20.6%), China flights (18.8%) and SE Asia service (16.7%). Some 49.6% of its KRW323.7 billion in cargo revenue, up +35% year-over-year, was generated on South Korea - USA flying.

December 2010: Asiana Airlines (AAR) is the 2nd designated South Korean carrier operating jet airplane services to 12 domestic and 73 international destinations in 21 countries in Asia, Australasia, Europe, the Middle East, and North America. It has a substantial cargo operation.

January 2011: (ARINC) Inc deployed 4 new remote ground stations to enhance coverage of its GLOBALink/VHF data link network for aviation in South Korea. 2 new ground stations were deployed at Cheongju and Yeosu International to begin providing coverage, while two auxiliary ground stations were deployed to enhance existing coverage at Gimpo and Incheon International. (ARINC)’s network of 11 GLOBALink/VHF ground stations in South Korea covers most of the country’s major international airports, it said.

(AAR) placed a firm order for 6 A380s to be delivered from 2014 - 2017, saying the airplanes will complement the 30 A350s it already has on order for delivery beginning in 2016. (AAR) has not decided how it will configure the cabins, but will offer 3 service classes. (AAR) said its cabin specifications to be determined by year end will be "state-of-the-art" offering "distinct, high-end service." The order is valued at around $1.8 billion based on list prices.

SEE ATTACHED - - "AAR-A380 ORDER-2011-01."

(AAR) plans to operate the airplanes, 2 of which will arrive in 2014, 2 in 2015 and 2 in 2017, to the USA and/or Europe. "Asiana (AAR)'s decision to acquire the A380 was based on the increase in the number of [free trade agreements] in which Korea is engaged and the recent addition of Korea to the USA Visa Waiver Program," President & (CEO) Young-Doo Yoon said. "Due to favorable factors like these, forecasts indicate a steady and stable 5% yearly increase of passengers to Korea and the Asia/Pacific region." He added that "the significantly reduced operating costs and fuel efficiencies afforded by the airplane will enable us to enhance our productivity and reduce our carbon footprint."

Airbus (EDS) has received 240 firm orders for the airplane from 18 customers.

(AWAS) (AWW) delivered 1 A321-200 to Asiana Airlines (AAR) for sublease to its subsidiary Air Busan (ABN), which will operate the airplane from Busan to Taipei, Hong Kong, Osaka, and Cebu.

February 2011: Asiana Airlines (AAR) posted 2010 net income of +KRW236 billion/+$211.3 million, reversed from a net loss of -KRW266.3 billion in 2009, as annual revenue surged +30.5% to a record KRW5.07 trillion.

Expenses rose +7.6% compared to 2009 to KRW4.44 trillion and 2010 operating income was +KRW635.7 million, turned around from an operating deficit of -KRW236.7 million in the prior year. The positive full-year result was achieved despite a -KRW207 million fourth-quarter loss, which was narrowed from a -KRW519 million deficit in the prior-year quarter. 4th-quarter revenue lifted +17.6% to KRW1.28 trillion.

Revenue generated from international passenger operations (responsible for 91.8% of Asiana (AAR)'s total passenger revenue) increased +30.6% in the 4th quarter compared to the 2009 December period to KRW687.1 billion. International passenger traffic lifted +7.3% in the 4th quarter to 6.43 billion (RPK)s on a +6.1% heightening of capacity to 8.82 billion (ASK)s, producing a load factor of 73% LF, up +0.8 point. Yield improved +21.8% to KRW106.8.

(AAR) said 4th-quarter traffic to China rose +23% with yield increasing +14%. For the 3 month-period, yield on USA traffic lifted +24% on a +4% rise in (RPK)s, while yield on European Union (EU) traffic jumped +39% on a -11% reduction in (RPK)s.

Turning to the current year, (AAR) said that overall revenue is expected to rise +8.4% to KRW5.5 trillion, though operating income is forecast to dip -4% to KRW635.7 billion on a -1.4 point decline in operating margin to 11.1%.

Full year capacity is expected to rise +4.3% to 36.23 billion (ATK)s. It projected international yield will grow +6.9% to KRW110 for the year.

(AAR) is slated to receive 2 A321s and 1 A330 in the current quarter, which will comprise its total airplane deliveries scheduled for 2011, bringing its passenger fleet to 62. It has orders for 6 A380s for delivery from 2014 - 2017 and 30 A350 XWBs for delivery from 2016 - 2022.

Rolls-Royce (RRC) said that Asiana Airlines (AAR) selected the (Trent 900) to power the 6 A380s (AAR) has on order for delivery from 2014 to 2017. The contract includes a TotalCare long-term service agreement.
(AAR)'s selection marks the 1st firm order for the engine type since the uncontained failure of a (Trent 900) on a (QAN) A380 on November 4. (AAR) Senior VP Legal Affairs & Purchasing, Yong Wook Lee said, "The (Trent 900) will offer us economic benefits that will maximize the reliability of our A380s." Rolls (RRC) Senior VP Civil Aerospace, Jim Sheard added, "This confirms the (Trent 900) as the true market leader and engine of choice for the majority of A380 operators." (RRC) noted that (Trent 900) engines have been selected by 10 of 15 airlines that have ordered the A380.

May 2011: Asiana Airlines (AAR) will launch daily, A320 Busan service to Ho Chi Minh City and Hanoi on June 1. It will also increase 7x-weekly, Seoul Incheon - Ho Chi Minh City service to 14x-weekly on June 23.

(APG) announced that China Southern Airlines (GUN) and Asiana Airlines (AAR) were activated in its (APG) Interline E-Ticketing (IET), bringing the number of airlines included in the program to 74 worldwide. (APG) (IET) is open to all (IATA) (ITA) and non-(IATA) scheduled airlines, with the sole condition that they are e-ticketing eligible on Global Distribution Systems (GDS). (APG) introduced the (APG) (IET) hub in cooperation with Heli Air Monaco (YO/747) in 2008, enabling airlines to interline with multiple other airlines through a single (IET) implementation. The solution is administered by (APG)’s Paris head office and marketed by (APG)-Global Associates around the world. “Joining the (APG) (IET) program permits airlines to use (YO-747) neutral e-ticketing documents in (IATA) Billing & Settlement Plans worldwide and the Airlines Reporting Corporation in the USA where they do not participate themselves,” noted (APG) (IET) Executive Product Director & (CEO) France Sandrine de Saint Sauveur. “This allows the airlines to widen their marketing reach to >82,000 (IATA) and (ARC) accredited travel agents. In addition, the airlines get access to the growing pool of Interline carriers with whom they may not have interline ticketing agreements directly.”

June 2011: Asiana Airlines (AAR) began code share flights with (EVA) Airlines on Seoul Incheon - Taipei service on June 1.

July 2011: ACCDT: An Asiana Airlines (AAR) 747-48EF (CF6-80C2B1F) (1370-29907, /06 HL7604) cargo plane crashed into waters off Jeju Island resulting in the death of 2 flight crew (FC) members. It was (AAR)`s 1st accident since one of its passenger airplanes crashed into a hill in 1993.

(AAR) and the Land, Transport & Maritime Affairs Ministry said the
747-48EF cargo jet crashed into waters 129 km SW from Jeju International Airport at 4:12 am. It crashed while flying to the Jeju airport for an emergency landing after a fire broke out in its cargo, according to (AAR).

Maritime patrol boats and helicopters searched for captain (FC), Choi Sang-ki and co-pilot (FC), Lee Jeong-woong in waters where the plane crashed, but they remained missing.

Jeju maritime police reported a communications interruption with the plane at 4:28 am and immediately dispatched 5 patrol boats and 4 helicopters to the scene of the crash. They collected >50 pieces of debris and fragments of the plane having an Asiana (AAR) logo.

Investigators are expected to focus on the flammability of cargo carried by an (AAR) 747-48EF freighter. According to (KAL) and South Korean government officials, the pilots (FC) reported a fire and control problems about 1 hour into the flight and were diverted to Jeju when contact was lost.

The freighter was carrying 58 tonnes of cargo, including 0.4 tonnes of materials such as lithium batteries, paint, amino acid solution and synthetic resin. According to "The Korea Times," (AAR) (CEO) Yoon Young-Doo said, "We load and manage lithium batteries according to the regulations set by the International Air Transport Association (IATA). The goods on the cargo plane were also managed according to the checklist and double-checked by the captain (FC)."

The captain (FC) had 14,123 hrs of flight time, of which 6,896 were on the 747. The co-pilot (FC) had 5,211 hrs of flight time. The 747F that crashed had its 1st flight in February 2006.

While there is discussion about a possible cargo-hold fire, there has been no conclusion reached regarding the crash's cause, authorities stressed. The USA (FAA) last year issued a Safety Alert for Operators on carriage of lithium batteries as cargo on airplanes.

A comment by Captain Bill Minkoff: "While flying as a heavy jet captain and serving as a member of the (ALPA) (MEC) Safety Committee at a major airline I witnessed 1st hand how quickly airplane fires can engulf and disable flight crew (FC) members and airplane systems. Long ago, I made the decision to brief that in case of fire we were going to land the airplane, not necessarily at an airport."

The wreckage of a (AAR) 747-48EF that crashed into the waters off South Korea has been found almost 3 months after the incident. South Korean and (AAR) officials said that rescue teams retrieved the bodies of the two pilots (FC), and brought them to shore.

The search for the cockpit data recorder (CDR) and the voice recorder (CVR) continues, they added. There was no information on the state of the airframe.

The following is a report released 26 September 2012:
Korean investigators have revealed only 18 minutes elapsed between detection of fire on board the (AAR) 747-400F, and the fatal loss of the airplane in the sea. But while the inquiry has disclosed more details of the dangerous cargo on board the airplane, it has yet to reach conclusions over the origin of the fire.

The cargo jet, operating Seoul - Shanghai on 28 July 2011, crashed about 130km/70nm west of Jeju while attempting to divert to the island. Preliminary findings by Korea's Aircraft & Railway Accident Investigation Board show the airplane was 50 minutes into its flight and had just been transferred to Shanghai area control center when it made the emergency call.

* RUDDER DIFFICULTIES

One of the pilots (FC) mentioned an aft cargo fire and that the airplane was descending to 10,000 ft/3,050 m. It turned NE, requesting radar vectors to Jeju.

Data from Seoul Incheon area center indicates the airplane, traveling at about 400 kt/740 km/h, continued to descend to about 8,000 ft before climbing again, in an unstable vertical profile.

Communications with air traffic controllers in Seoul were relayed via a Korean Air (KAL) airplane which was operating near the stricken jet. These communications also included a statement from the (AAR) Captain (FC) that the rudder control "is not working."

The Incheon data shows the airplane was rising and sinking before it climbed to about 14,000 ft and sharply descended.

Data from a Korean monitoring and control station suggest the airplane fell some 10,000 ft in 90s. As it descended, the Captain again said there were problems with the rudder and flight controls and the First Officer (FC) added, shortly afterwards: "We have heavy vibration on the airplane, may need to make an emergency landing, emergency ditching. Altitude control is not available due to heavy vibration, going to ditch." Contact with the airplanet was then lost. During the emergency, about 18 minutes, the airplane's (ACARS) addressing system issued several main-deck fire-detection messages as well as failure signals relating to the yaw damper and flight recorder.

Search teams (hampered by atrocious weather, including seven typhoons) combed the area in the weeks after the accident but failed to detect a signal from flight recorder locator beacons. Operations to retrieve wreckage, however, continued until mid-June. Wreckage analysis showed severe damage to the airframe, from fuselage station 1700 to the aft pressure bulkhead, and this section appears to have sustained the greatest fire damage. Much of the damage occurred between the aft main-deck freight door and the L5 door after exposure to the highest temperatures - illustrated by severe thermal damage on the interior structure and discoloration of the paint on the exterior of the skin. Soot trails on the aft external skin indicated smoke had exited outflow valves. There was also evidence of sooting "all the way forward" on the main cargo deck, the inquiry says, on ceiling liners beneath the cockpit. When the airplane was loaded at Seoul Incheon airport, 24 cargo positions on the main deck and 11 in the lower hold were used.

The main-deck pallets included two which were listed as containing dangerous goods, loaded into the positions designated ML and PR, adjacent to the rear freight door. Among these hazardous shipments were lithium-ion batteries (for use in hybrid electric vehicles) as well as highly-flammable and corrosive liquids, for integrated-circuit manufacture, plus lacquers and paints.

Lithium batteries have long been a concern to operators, and earlier this year the International Civil Aviation Organization (ICAO) examined new safety standards in the wake of the (AAR) crash and the loss of a (UPS) 747-400F in Dubai after an in-flight fire in September 2010.

* BATTERIES CONCERN

One of (AAR)'s instructors, exclusively in charge of dangerous goods training for (AAR)'s pilots (FC), told the inquiry he had emphasized pilot awareness of safety standards for lithium batteries following the (UPS) accident.

The inquiry points out that results of various electrical and shock tests carried out by the battery manufacturer two years before the crash indicated "no problems that would lead to thermal runaway or fire." It adds that the manufacturer has adopted a 10% state-of-charge for all its lithium-ion battery shipments. Neither the loadmaster nor the nine handlers who dealt with the dangerous good placed on the (AAR) airplane observed any damage or leakage to the containers.

(AAR) had taken delivery of the General Electric (CF6)-powered 747, which was built as a freighter, in February 2006 and the airplane (HL-7604) had accumulated >28,750 hrs in almost 4,800 cycles.

November 2011: Asiana Airlines (AAR) will expand its long-haul routes and focus on becoming a world top 10 carrier by 2015, according to (AAR)’s Senior VP Strategic Planning Kim Ebae.

Kim Ebae said (AAR)'s fleet would grow from 71 airplanes this year, to 83 in 2013 and 88 in 2015. (ATK)s would increase by +5% this year, +14% in 2013 and +25% in 2015, he said.

“We have expanded our long-haul routes and established a second hangar at Incheon [Seoul Airport]. We have continued to grow through the various crises and we have established a loyal customer base,” Kim said. “We want to be in the world’s top 10 in terms of operational revenues and profit.”

(AAR) will take delivery of its 1st A380 in 2014 and its 1st A350 in 2015. These new airplanes will be key to (AAR)’s growth strategy; the A380, in particular, will be used to increase long-haul capacity to routes such as Korea - USA, where Kim said (AAR) has a supply shortage.

Kim said (AAR) would be looking to develop “new growth engines” from 2013 but added he could not elaborate on those plans.

December 2011: Asiana (AAR) is to fly to Chonqing this month, a large city on China's Yangtze River and an important inland manufacturing center. More on the tourist side, it will fly to Danang, Vietnam, twice a week with A321s. Danang is growing as a tourist destination because it is located near a number of (UNESCO) world heritage sites and endowed with pristine beaches that were popular with American soldiers during the Vietnam War.

January 2012: Asiana Airlines (AAR) recruits pilots (FC) through Flight Crew (FC) leasing firms such as Rishworth Aviation, Crew Resources Worldwide or World Airline Services and is currently recruiting pilots (FC). Applicants can apply online through these crew leasing firms.

Rishworth Aviation is a flight crew (FC) leasing firm recruiting pilots for a large number of client airlines on various airplane types including most Boeing (TBC) and Airbus (EDS) airplanes, ATRs and many more. This month, Rishworth Aviation is recruiting for pilots (FC) for Asiana Airlines (AAR) - A320/321 Captains. Application information and position details are available online at http://www.rishworthaviation.com

See FltOps.com and FAPA.aero.

February 2012: Seoul Incheon (ICN) Airport is discounting landing fees in an aggressive marketing campaign aimed at attracting new airlines to South Korea’s main international airport. (ICN) is offering a 100% discount on landing fees for new carriers in their first year of operation at the airport, followed by 75% off in the second year and a 50% reduction in year three.

(ICN) executive VP, Young-Geun Lee said that the airport generated $1.1 billion in revenue in 2011. He said that 65% of the airport’s business comes from “non-aviation [sources] like duty-free sales.”

(ICN) opened in 2001 and operates 410,000 flights annually, slated to grow to 530,000 by 2020. Some 70 airlines serve 176 cities from (ICN). “Within three flight hours, we have 61 cities with populations over one million people,” Lee said.

The new T2 terminal is under construction and should be in service in 2017, adding an additional capacity of 18 million passengers at a cost of $4 billion, Lee said. After T2 opens, the next expansion phase will include constructing a fourth and fifth runway.

(ICN) handled about 35 million passengers and 2.5 million tons of cargo in its six cargo terminals last year. It is the world’s second largest international cargo airport after Hong Kong. Lee said that 50% of (ICN)’s cargo volume is in transit. Some 36 wide body freighter parking stands are available. By 2020, 7 million tons of cargo should pass through (ICN), according to Lee.

Lufthansa Technik (DLH) (LTK) has extended its existing Total Component Support (TCS) cooperation with Asiana Airlines (AAR) for an additional 10 years. The new agreement, announced at the Singapore Airshow, covers (AAR)’s fleet of 29 A320s and eight 737s and includes component pooling and Maintenance Repair & Overhaul (MRO) services. The renewal also includes extending the supply to include “many” new part numbers.

August 2012: Asiana Airlines (AAR) reported a non-consolidated net loss of -KRW47.3 billion/-$41.8 million for the second quarter, reversed from the year ago quarter’s +KRW17.7 billion profit, largely owing to “the continuous high fuel cost and the increment of operating cost as the operation expands,” it said.

Last year, (AAR) set growth targets through 2015 to expand its long-haul routes, grow its fleet to 83 airplanes in 2013 and 88 in 2015, and increase (ATK)s by +14% in 2013 and +25% in 2015.

Revenues for the second quarter increased +4.6% to KRW1.37 trillion, while operating income fell -56% to KRW27 billion. Fuel expenses for the quarter jumped +11%, as both fuel prices and exchange rates increased, to KRW5.19 trillion. It also saw a +12.8% hike in employee wage costs to KRW1.55 trillion as the number of employees increased year-over-year.

International passenger traffic rose +6.8% to 7.45 million (RPK)s on a +4% jump in capacity to 9.49 million (ASK)s, while load factor jumped +2.1 points to 78.5% LF. This included a +87.8% increase in traffic from the USA to 2.5 million (RPK)s, and a -0.6% drop in traffic from Southeast Asia to 1.81 million (RPK)s. (AAR) said it expects profitability to improve with the advent of peak season and new airplane introductions to the fleet in the third quarter. (AAR) operated 74 airplanes by the end of the second quarter.

747-446F (26343, HL7618), ex-(N364AS), Aersale leased.

September 2012: Korean authorities have designated four carriers from the Republic of Korea: (Asiana Airlines (AAR), Jin Air (JIN), Eastar Jet (EJS) and T’way Airlines (TWY)) to operate on the Seoul (ICN) - Vladivostok, Russia (VVO) route after the two countries agreed to remove restrictions.

Korean authorities have set frequencies to 36 weekly flights from the 2012/2013 winter season. (AAR) will launch daily, A321 (ICN) - (VVO) service in November. Other carriers have not announced their plans.

Asiana Airlines (AAR) launched a mobile integrated maintenance system in its Aviation Maintenance department. It developed the solution for maintenance (MT) personnel to operate maintenance manuals, check departure/arrival times, inventory and send pictures from the field.

November 2012: Asiana Airlines (AAR) code shares with Air Macau (MCU) on the Macau - Seoul Incheon service. (AAR) will place its code on (MCU)'s daily service on the route, starting 30 November.

(MCU) also has code share agreements with Air China (BEJ), All Nippon Airways (ANA) and Philippine Airlines (PAL). (MCU) is partly owned (80.8%) by Air China (BEJ).

(AAR) launched two new international routes this month. (AAR) now flies daily from its Seoul Incheon (ICN) hub to Vladivostok (VVO) in easternmost Russia using A321s. The 2,275 km route, which launched on 16 November, competes with daily flights by both Korean Air (KAL) and Vladivostok Air (VLK). This is a major expansion in the Russian market as it is (AAR)’s third route to the country after Khabarovsk and Yuzhno-Sakhalinsk, which are served with lower frequencies. On 18 November, (AAR) also launched its second route to Okinawa (OKA) in Japan. In addition to its Seoul Incheon flights, (AAR) now flies once a week from South Korea’s second-largest city, Busan (PUS) with A320s.

January 2013: Asiana Airlines (AAR) became the second carrier to operate on the 3,700 km route from Seoul Incheon (ICN) to the capital of Myanmar, Rangoon (RGN), on 19 December. Twice-weekly departures are offered on the route until 3 March using 250-seater 767-300s. Another Korean carrier, Korean Air (KAL), already serves the route with daily flights.

February 2013: JetBlue Airways (JBL) and Asiana Airlines (AAR) launched an interline agreement to allow single-ticket travel combining flights on both carriers and one-stop baggage check-in for transfers between the airlines at New York (JFK) and Los Angeles.

March 2013: South Korea had a record 91.8 million passengers in 2012 which was mainly driven by its international growth. The world’s 15th largest economy in terms of Gross Domestic Product (GDP) and 12th by purchasing power parity, South Korea is home to 50 million people who like to describe their home country’s economic success as “Miracle on the Han River.” But there’s no miracle here: rapid export-fuelled growth first transformed the country into one of the world’s most industrialized, and more recently, helped it weather the global crisis untouched. In fact, South Korea was one of the few developed countries to avoid recession altogether, and is now named as one of the emerging markets in the (MIST) group of countries, along with Mexico, Indonesia and Turkey.

Traffic was up 4.9% in 2012, with Seoul Incheon top for growth. Strong economic performance and the country’s high exposure to international trade have long been the driving forces in the development of South Korean commercial aviation. Average annual growth of +4% over the last decade included strong post-credit crunch traffic development (+15.6% in 2010, +5.2% in 2011, and +7.5% in 2012) and led to the all-time best annual result of 91.8 million passengers last year.

South Korea’s largest airport (at 40% of 2012 traffic), Seoul Incheon, handled 39 million passengers in 2012, achieving an annual rate of growth of +11%, which made it the fastest-growing of the country’s main airports. Notably, Seoul Incheon handles prevailingly international traffic, while the capital’s second facility, Gimpo, commands most of domestic movements in Seoul.

Whereas domestic traffic has been stagnant, international traffic grew by +12% in 2012. South Korea is widely known for its highly advanced rail transportation system, including 2 high-speed lines operated within the (KTX) project, which has had a negative influence on the country’s domestic air market. A total of 43.8 million people traveled on domestic services in South Korea in 2012, which constitutes a meager +1.1% increase compared to a decade ago: in 2003, 43.3 million flew domestically. In 2012, South Korea’s domestic market grew by a modest +3%.

Contrasting with the domestic market is the international segment, which has more than doubled in size over the last decade, falling short of 48 million by just 40,000 passengers in 2012. Unlike domestic traffic, which suffered more from the (SARS) epidemic, the international market to some extent felt the impact of global downturn with passenger figures falling by up to -5.2% annually in 2008 and 2009. However, the trend was soon reversed, and 2010 saw a staggering growth of +19.5%. While results of similar order might seem difficult to sustain long-term, international traffic to and from South Korea was up almost +12% again in 2012.

China, Japan and the USA are biggest international markets. Analysis of (OAG) Schedules iNet capacity data for April 2013 shows that more than a half of international frequencies are allocated to the 2 biggest international markets from South Korea (China (29.4%) and Japan (24.4%)). Compared to the same period last year, the Chinese market is the more dynamic 1 of the 2, with seat capacity up +8.9% (vs. +2.2% for Japanese routes).

At a 3rd of the size of the market to China in terms of seats offered in April 2013, the USA constitutes the 3rd-largest country market from South Korea. Korean Airlines (KAL) and Asiana Airlines (AAR) serve 13 and 9 USA routes, respectively, compared to 1 each by Delta Air Lines (DAL) and United Airlines (UAL). Germany, which accounts for around 1% of international capacity from South Korea, is the only European country to make it into the top 12 list, while the market from South Korea to the UK, is only the 16th busiest in terms of weekly seats.

April 2013: Asiana Airlines (AAR) announced its co-(CEO) Han Chang Su has resigned as of March 29. Co-(CEO) Yoon Yeong Du continues his duty as (CEO) at the company.

July 2013: ACCDT: 777-28EER (PW4090) (553-291717, /06 HL7742) crash-landed at San Francisco International Airport (SFO) on Saturday, July 6th. 2 passengers were confirmed dead (+1 more died later), and >180 suffered injuries, and at least 5 of those hospitalized were in critical condition. The impact ripped off the airplane's wheels, tail and engines resulting in a severe fire in the fuselage above the wings and forward including the cockpit (see attached article and photos - - "AAR-2013-07-ACCDT-777-A/B/C/D/E/F/G/H/I" & "AAR-2013-07-ACCDT-X/Y/Z."

Just before 11:30 am San Francisco time, July 6, the 777 came down short of (SFO) runway 28L; the rear of the airplane apparently hit a sea wall. Most of the 307 passengers and crew aboard were able to safely evacuate after the 777 came to a stop completely off the runway with its tail section detached. But there were two fatalities (another one died later), identified as teen-aged female Chinese citizens, and an unspecified number of passengers sustained injuries, some reportedly very serious. After it was on the ground, the 777 was engulfed in flames, significantly damaging the fuselage and the passenger cabin, but there did not appear to have been passengers and crew still on board during the worst of the fire.

(NTSB) Chairwoman, Deborah Hersman said that there was “good data” from the (CVR) and (FDR). According to the data, the Asiana (AAR) 777, en route from Seoul Incheon International Airport, was cleared by air traffic control for a visual approach to runway 28L and all seemed normal. “The airplane was configured for approach with the flaps at 30 degrees and the [landing] gear down,” Hersman said. “The target speed for the approach was 137 knots. The approach proceeded normally as they descended.” However, “the speed was significantly below 137 knots, and we’re not talking about [being too slow by] a few knots,” she said. Hersman clarified that the airplane speed was just 103 knots at the time of impact.

The pilots (FC) identified that the airplane was going too slowly seven seconds before impact, Hersman said, noting that one of the crew members “made a call to increase speed.” The sound of a stick shaker is heard on the (CVR), 4 seconds before impact, indicating an imminent stall, Hersman said. There was then “a call to initiate a go-around 1.5 seconds before impact.”

The (FDR) indicated that “the throttles were advanced a few seconds prior to impact and the Pratt & Whitney (PW4090) engines appeared to have responded normally,” Hersman said. She said that “both of the engines were producing power at the time of impact” and there was no evidence of problems with the engines.

The 777-200ER involved in the accident had accumulated 36,000 flight hours and 5,000 cycles.

The following report is from the "Aviation Herald" by Simon Hradecky,
An Asiana Airlines 777-28EER performing flight OZ-214 from Seoul (South Korea) to San Francisco, California, USA with 291 passengers and 16 crew ((FC) - (CA)), touched down short of runway 28L impacting the edge separating the runway from the San Francisco Bay, 115 meters/375 feet ahead of the runway threshold, while landing on San Francisco's runway 28L at 11:27L (18:27Z). The tail plane, gear and engines separated, the airplane came to a rest left of the runway about 490 meters/1600 feet past the runway threshold. Following first impact at a high angle of pitch, the airplane lost gear and tail section, skidded along the runway, pitched up to about 45 degrees, the left wing entangled with the ground, sending the airplane into a spin and separating the engines. The airplane turned around counterclockwise by nearly 360 degrees with the nose coming down again and stopped, burst into flames and burned out. 305 occupants were able to evacuate the airplane in time and are alive. 2 people were confirmed killed in the accident (another died later), 10 people were in critical condition, 38 more were in hospital care with injuries of lesser degrees, and 82 occupants received minor injuries. The majority of survivors escaped without injuries.

Air Traffic Control (ATC) recordings showed the 777 was on a normal approach and was cleared to land on runway 28L, no emergency services were lined up, and all traffic was running normally. During a transmission of the (ATC) tower, shouting in the back of the tower was heard, emergency services began to respond, and all airplanes on approach were instructed to go around. The airport was closed. United (UAL) flight 885, waiting for departure at the hold short line threshold 28L, reported people were walking around both runways. There were a number of people near the numbers of runway 28R, who were obviously survivors.

An observer on the ground reported that the approach of the (AAR) 777 looked normal at first, but at about 5 seconds prior to impact, the 777 began to look low and then impacted the sea wall ahead of the runway.

On July 7th, the (NTSB) reported the flight crew (FC) were cleared for a visual approach to runway 28L. The flight crew (FC) acknowledged, flaps were set at 30 degrees, gear was down, Vapp was 137 knots, a normal approach commenced, no anomalies or concerns were raised within the cockpit, and 7 seconds prior to impact, a crew (FC) member called for speed; 4 seconds prior to impact, the stick shaker activated, a call to go-around, which happened 1.5 seconds prior to impact. This data was based on a 1st read out of the cockpit voice recorder (CVR). According to the flight data recorder (FDR), the throttles were at idle, the speed significantly decayed below target of 137 knots (the exact value was not yet determined), the thrust levers were advanced and the engines appeared to respond normally. The (NTSB) confirmed the (PAPI)s runway 28L were available to the approaching airplanes before the accident, however, they were damaged in the accident and thus went out of service again. The localizer was available, the glideslope was out of service, and according NOTAMs were in effect. There were no reports of windshear and no adverse weather conditions. The air traffic controller was operating normal, no anomaly was effective until the controller noticed the airplane had hit the sea wall. The controller declared an emergency for the airplane and initiated emergency response. (ARAIB) and Asiana (AAR) personnel arrived on the scene and joined the investigation. The Mayor of San Francisco reported runway 10L/28R was cleared for service.

On July 8th 2013 the (NTSB) reported the pilots (FC)'s flight bags and charts were located, and the proper (approach) charts for San Francisco Airport were in place in the cockpit. There were 4 pilots (FC) on board of the 777. They were being interviewed on July 8th, which would determine who was the pilot (FC) flying and who was in command at the time of the approach. The cockpit was documented and the switch positions identified. Both engines were delivering power at the time of impact, consistent with the flight data recordings. The right hand engine, found adjacent to the fuselage showed evidence of high rotation at impact, the left hand engine separated from the airplane also showed high rotation at impact. The 777 joined a 17nm final, the crew (FC) reported the runway in sight, before being handed off to the tower. The autopilot was disconnected at 1600 feet, 82 seconds prior to impact. The airplane descended through 1400 feet at 170 KIAS 73 seconds prior to impact, descended through 1000 feet at 149 KIAS 54 seconds, 500 feet at 134 KIAS 34 seconds, 200 feet at 118 KIAS 16 seconds prior to impact. At 125 feet and 112 KIAS, the thrust levers were advanced and the engines began to spool up 8 seconds prior to impact. The airplane reached a minimum speed of 103 KIAS 3 seconds prior to impact, the engines were accelerating through 50% engine power at that point, and accelerated to 106 knots. The vertical profile needed to be assessed 1st. There was debris from the sea wall thrown several hundred feet towards the runway, and part of the tailcone was in the sea wall. A significant portion of the tail was ahead of the sea wall in the water.

On July 9th 2013 the (NTSB) reported based on pilot (FC) interviews, that at 500 feet AGL the (PAPI)s were showing 3 red, 1 white, and the pilot (FC) began to pull back on the yoke to reduce rate of descent, assuming the autothrottles would maintain the speed set to 137 knots. A lateral deviation developed taking the attention of the crew (FC). Descending through 200 feet, all (PAPI)s were red and the speed had decayed into the red/black marked range. The crew (FC) realised the autothrottles were not maintaining the target speed, and at that point, the autothrottles started to move the levers forward. There were 3 pilots (FC) in the cockpit. The captain under supervision was pilot (FC) flying, occupying the left hand seat, the training captain was pilot (FC) monitoring, occupying the right hand seat, and the relief first officer (FC) was occupying the observer seat. The other relief captain was in the cabin at the time of the landing. The captain under supervision had 9700 hours total flying experience, had flown 10 legs for a total of 35 hours on the Boeing 777-200 and so far was about half way through his supervision. The training captain was on his 1st flight as training captain. The 2 pilots (FC) had never flown together before. The autothrottle switches were found in the armed position post accident. It is not yet clear in what mode the autothrottles were and whether autothrottles were engaged or not. 2 flight attendants (CA) in the aft cabin were ejected from the airplane during the accident sequence and were later found up and aside of the runway with injuries. At least 1 of the escape slides inflated inside the cabin.

On July 8th 2013, South Korea's Ministry of Transport reported the captain (43, ATPL, 9,793 hours total) of the ill-fated flight was still under supervision doing his 1st landing into San Francisco on a Boeing 777, although he had 29 landings into San Francisco on other airplane types before. He was supervised by a training captain with 3,220 hours on the Boeing 777, and all responsibilities were with the training captain.

The pilot in command of Asiana Airlines Flight 214, the Boeing 777-200ER that crashed on landing at San Francisco International Airport (SFO) July 6, told investigators that he assumed the airplane’s auto-throttles were engaged and maintaining a speed of 137 knots as the 777 came in for a landing. The airplane’s speed dropped to just 103 knots at the time of impact.

The commanding pilot (FC) was 1 of 3 pilots (FC) in the cockpit at the time of the crash, sitting in the right seat. He was serving as an instructor for the pilot (FC) flying the airplane, sitting in the left seat, who was in the midst of training on the 777 after serving for 8 years as an Airbus A320 captain for Asiana (AAR).

“At about 500 feet, [the commanding pilot] realized they were low,” (NTSB) Chairwoman Deborah Hersman said. “He told the [flying] pilot (FC) to pull back.” The commanding pilot (FC) told the (NTSB) he realized a go-around was necessary and noted the flying pilot (FC) had already pushed the throttles forward. But it was too late; the airplane’s main landing gear was the 1st to impact (SFO)’s sea wall as the 777 came down short of runway 28L, Hersman said. The tail section then hit the sea wall. The airplane “went into a 360 degree spin,” she added.

Debris from the crash, in which two passengers were killed, can be seen from the sea wall all the way to where the airplane came to a stop, Hersman said. “Sections of the cabin are found very early on in the debris field,” she noted, pointing out that airplane parts, galley materials, newspapers and magazines were scattered throughout the debris field.

The pilot (FC) at the controls of (AAR) Flight 214 has reported seeing a blinding flash of light during the 777-200ER’s descent into (SFO). It is unclear what factor, if any, the reported flash of light played in the July 6 crash-landing that killed two passengers.
The detail about the flash of light came as more information emerged about the 777’s descent into (SFO) and the immediate aftermath of the crash. USA (NTSB) Chairwoman, Deborah Hersman said the pilot (FC) sitting in the left seat and controlling the airplane, Gang-Guk Lee, reported seeing the flash of light when the 777 was at about 500 feet, which was about 34 seconds before the 777’s main landing gear hit (SFO)’s sea wall. “We really don’t know what it could have been,” Hersman said. She added that the pilot (FC) told investigators he wasn't sure what the bright light was and that it could have been a reflection of the sun. Gang-Guk Lee also told the (NTSB) he did not think the light affected his vision.

While the pilots (FC) did not realize the 777 had slowed to a dangerously low speed until just seconds before impact, there were signs during the descent that something was amiss. Jeong-Min Lee, the pilot (FC) in command, who was sitting in the right seat and acting as a 777 instructor to Gang-Guk Lee (a veteran pilot (FC) in the midst of transitioning to the airplane type) told investigators that the 777 was “slightly high when they passed 4,000 feet.” Then at about 500 feet (the same time the pilot (FC) in control reported seeing the flash of light) Jeong-Min Lee “realized they were low,” Hersman said. However, it was only seconds before impact when the pilots realized the speed had fallen from the target speed of 137 knots to just 103 knots

Jeong-Min Lee has told investigators he thought the auto-throttles were engaged and maintaining speed. Hersman said the (NTSB) has determined that “multiple autopilot modes and multiple auto-throttle modes” were engaged in the last 2-and-a-half minutes of the flight. Investigators don’t know if this was intentional or inadvertent, she added.

Once the airplane came to a stop, evacuation did not immediately begin because the pilots (FC) in the cockpit were not aware the airplane was on fire. Hersman said a flight attendant (CA) informed the pilots (FC) of the fire and the evacuation began. 90 seconds after the airplane came to a stop, the 1st 2 doors were opened and passengers began evacuating down slides. Hersman said flight attendants (CA) and pilots (FC) were involved in fighting the fire as the evacuation took place. The 1st emergency response vehicle arrived on the scene 2 minutes after the 777 came to a stop. The 1st fire extinguishing agent was applied 3 minutes after the airplane came to a stop.

Asiana Airlines (AAR) may take a charge of at least 20 billion won/$18 million from the crash of its plane and that will push South Korea’s 2nd-largest carrier to a loss this year, 5 analysts said. Insurance payment won’t cover the loss of airplane, litigation and other charges and an erosion in passenger numbers after the crash of the 777 airplane. The loss estimate contrasts with a projected +20.8 billion won profit, according to the average of 18 analyst forecasts compiled by "Bloomberg." “A loss is inevitable this year because of the crash,” said Kang Seong Jin, an analyst at Tongyang Securities Inc in Seoul. “They lost a plane, and then there are compensation costs, which will be determined later.” The Seoul-based company will also have to brace for lower traffic this year as travelers switch to other airlines on safety concerns, the analysts said. A loss for (AAR) contrasts with the optimism expressed by the International Air Transport Association (IATA) last month, when it predicted global airline earnings will be +20% higher this year than forecast earlier, led by carriers in Asia.

Asiana (AAR)’s reputation as one of the top carriers for service (honed over a quarter century since its formation in the run-up to the 1988 Seoul Olympics) is in jeopardy after (AAR)’s second crash since 2011. Earnings will be crimped by rising litigation and insurance costs, and (AAR)’s training regimen will probably come under scrutiny as USA investigators probe why pilots (FC) didn’t react to a critical loss of airspeed until moments before the plane crashed into a seawall.

All but 3 of the 307 people on board survived the July 6 crash-landing, with at least 26 still hospitalized. It was the 1st fatal accident in the USA of a large jet since 2001.

SEE ATTACHED "EYEWITNESS ANIMATIONS" SIMULATION OF CRASH SHOWING ACTUAL CRASH PATH PLUS CORRECT LANDING OF HOW IT SHOULD HAVE BEEN OK - -

Capacity at Asiana (AAR), with 69 passenger planes in a total fleet of 80, may drop by -1.9% this year, said Park Eun Kyung, an analyst at Samsung Securities Company in Seoul. The loss in seats and traffic may erode sales by -70 billion won and that could have a bigger impact on operating profit, she said.

Asiana (AAR) is expected to recognize the loss from the airplane in the 3rd quarter, which will be bigger than its pre-tax profit forecast of +15 billion won. “Insurance premiums are likely to increase, especially with the crash taking place soon after the cargo plane crash in 2011,” Park said.

Asiana (AAR)’s previous disaster was the crash of its cargo freighter in the sea south of Jeju island in July 2011. It caused 200.4 billion won of damage. The 747-400 airplane was carrying 2 flight crew (FC) members and 58 tons of cargo to Shanghai from Incheon International Airport.

Park plans to adjust her forecast for earnings after more details on the crash emerge. She estimated in her July 7 note that (AAR) may post a profit of +11 billion won this year and sales of 6.1 trillion won. (AAR) had a profit of +62.5 billion won in 2012, compared with a loss of -29.9 billion won a year earlier. Sales climbed +5% to 5.89 trillion won.

Asiana Airlines (AAR) launched services on the 5,200 km route from its Seoul Incheon (ICN) hub to Jakarta (CGK) on July 19. Daily flights are carried out on the route, which was last operated by (AAR) in August 2005. Indonesia and Korea had recently renewed the bilateral air service agreement that increased air slots between both destinations from 10 to 23 flights per week. Cheol Woo Park, (AAR)’s General Manager Indonesia, commented: “In the future, (AAR) would connect more places both in Indonesia and Korea in order to boost business and tourism between the two countries. Flights to our 2nd Indonesia destination, Denpasar in Bali, will commence on July 25.” A330-300s are deployed to serve Jakarta and (AAR) faces competition from Garuda Indonesia (GIA) and Korean Air (KAL), both of which operate a daily schedule to the Indonesian capital.

(AAR) and its bigger domestic competitor, Korean Air Lines (KAL) are already suffering because of the weakening yen this year, which has reduced the number of Japanese passengers on their flights. Things aren’t looking any better for the 2nd quarter, according to Park Sung Bong, an analyst at Hana Daetoo Securities Company. “The drop in the number of inbound Japanese passengers may cut yields on Japan routes by -20%,” Park said. “Asiana (AAR)’s 2nd-quarter earnings may be below market consensus.”

Asiana (AAR)’s Japanese routes bear the highest yields, followed by China and the Commonwealth of Independent States (CIS), according to its 1st-quarter earnings report. Passenger yields, the average price a traveler pays to fly per kilometer, on its Japan routes dropped -16% from a year earlier to 17.4 cents in the 1st quarter, the report said.

Asiana Airlines (AAR), which in the previous week resumed services to Jakarta, started flying on the 5,200 km route from its Seoul Incheon (ICN) hub to Denpasar (DPS) on the Indonesian island of Bali. Beginning on July 25, (AAR) offers a 2x-weekly schedule connecting the 2 points and uses 767-300s to operate it. Competition in the market from comes from Korean Air (KAL) (9x-weekly frequencies) and Garuda Indonesia (GIA) (six).

(AAR) had the world’s 8th-oldest fleet, with an average age of 12.6 years, according to a Bloomberg Industries report in January. Air Arabia (ABZ) had the youngest at 3 years.

Carriers globally are likely to generate net income of +$12.7 billion in 2013, (IATA) said last month. That compares with forecast of $10.6 billion issued on March 20, and represents a +67% gain on last year’s profit of +$7.6 billion.

Airlines in all regions should post a profit this year, led by carriers in Asia with projected earnings of +$4.6 billion and North America with +$4.4 billion, (IATA) said. “It was already a very difficult market for Asiana (AAR) because of the weak demand on its Japan services,” Kang said. “The crash just made it more difficult.”

August 2013: Asiana Airlines (AAR) has opened a new airplane maintenance hangar at Incheon International Airport.

September 2013: Airbus (EDS) said the assembly of the 1st A380 for Asiana Airlines (AAR) is now underway at its Final Assembly Line (FAL) in Toulouse. “The main sections of the airplane arrived in recent weeks from the various manufacturing sites around Europe and are now being attached at the airframe assembly station,” Airbus said.
Asiana Airlines (AAR) will become the 12th operator of the A380 when it takes delivery of its 1st A380 in the second quarter of 2014. (AAR) has firm orders for 6 A380s and will operate the A380 on its primary routes from Seoul to the USA.

October 2013: Seoul’s Incheon International airport held a groundbreaking ceremony on September 26 to mark the start of construction of its second terminal. The new terminal is part of a won (W) 4.9 trillion/$4.55 billion third-phase wave of construction work, that also includes building a new network of roads and a second transportation center for the airport.

Incheon airport says that the additional terminal will help to raise capacity at the airport from 44 million passengers to 62 million, when it opens in 2017. At that point, it is expected that the existing terminal and aprons will have reached their saturation point.
Last year the airport handled 39 million passengers, an increase of +11%, while total airplane movements increased by +10% to 257,000.

A321-231 (5774, HL8181), ex-(D-AZAW), (BOC) Aviation (SIL) leased.

December 2013: REVIEW - 777 CRASH JULY 6TH AT SAN FRANCISCO (SFO):
The pilot (FC) at the controls of Asiana Airlines (AAR) Flight 214 when it crashed in July at San Francisco International Airport (SFO) has admitted to investigators he was “very concerned” about his ability to perform a visual approach landing on (SFO)’s runway 28L.

Gang-Guk Lee, a veteran Asiana (AAR) pilot (FC), was in the midst of a familiarization training period on the Boeing 777 at the time of the accident. In 19 years with the Seoul-based airline, he had been the pilot (FC) in command for about 5,000 flight hours, having previously flown the 737, 747 and served as an Airbus A320 captain.

With runway 28L’s glide slope out of service, the (AAR) 777 was cleared for a visual approach landing at (SFO). In a report released in advance of this hearing, the (NTSB) said Lee conceded in a post-crash interview with investigators that “he found flying the approach to (SFO) very stressful.” The board added that the pilot (FC) “stated it was very difficult to perform a visual approach with a heavy airplane.”

Lee knew the glide slope was out of service and the landing at (SFO) would be visual approach. Since “everyone else had been doing the visual approach he could not say he could not do the visual approach,” according to the (NTSB), which added, “Asked whether he was concerned about his ability to perform the visual approach, [Lee] said ‘very concerned, yea.’”

Lee additionally told the (NTSB) he was “not so confident” in the 777’s autoflight system prior to the accident, admitting “he felt he should study more,” according to the board.

The approaching 777’s speed fell from a target speed of 137 knots to just 103 knots before crashing. Lee said he thought the 777’s auto-throttle system was “always working” and “should have [prevented] the airplane going below the minimum speed.”

The (NTSB) did not identify any mechanical failures on the 777 and said it will continue to focus on the “human-machine interface in highly automated airplane” as its probe of the crash continues.

Asiana Airlines (AAR)’s 1st Airbus A380 has completed its maiden flight. Airbus (EDS) said the A380 flew on from Toulouse, France to the airplane manufacturer’s site in Hamburg, Germany, where it will undergo painting and cabin furnishing.

(AAR) will become the 12th operator of the A380 when it takes delivery of its 1st airplane in the 2nd quarter of 2014. (AAR) has firm orders for 6 A380s and will operate the airplane on its primary routes from Seoul to the USA.

The 1st A380 for Asiana Airlines (AAR) has rolled out of the Airbus (EDS) paint shop in Hamburg - - SEE ATTACHED - - "AAR-2014-02-A380 ROLLOUT." After completion of the cabin, the A380 will enter a final phase of ground and flight tests in Hamburg, during which all cabin systems will be thoroughly tested, including air flow and air conditioning, lighting, galleys, lavatories, seats and in-flight entertainment systems. The A380 will also undergo advanced performance tests before it flies back to Toulouse for delivery preparation in the 2nd quarter of this year.

(AAR) ordered 6 A380s in June 2011. The A380 will initially be used on regional routes from Seoul in Asia followed by long-haul routes to the USA.

May 2014: Asiana Airlines (AAR) has taken delivery of its 1st Airbus A380, becoming the 11th operator of the type in the world. The A380 was handed over to Park Sam Koo, Chairman of Kumho Asiana Group, by Fabrice Brégier Airbus President & (CEO), during a special ceremony in Toulouse, France.

(AAR) has ordered 6 A380s, powered by Rolls-Royce (RRC) (Trent 900) engines. (AAR) has specified a premium 3 class layout for its fleet, seating a total of 495 passengers, with 12F private suites in First Suite, 66C fully flat seats in Business Smartium and 417Y seats in Travel Class. All seats are equipped with the latest on-demand in-flight entertainment (IFE) systems.

Asiana Airlines (AAR) will initially deploy its new flagship A380 from Seoul on regional services in Asia to Tokyo, Hong Kong, and Bangkok, followed by long-haul routes to Los Angeles.

As part of its wide body fleet modernisation strategy, (AAR) also has 30 of the all-new A350 XWB on order. The A350 XWB will offer a step change in efficiency, with operating costs -25% lower than the competition. The A380 and A350 will complement an existing Airbus fleet at (AAR) that currently includes the A330 and A320 Family.

Airbus (EDS) currently has 324 firm orders for the A380, from 20 customers.

June 2014: SEE ATTACHED - - "AAR-2014-06-NTSB 777 CRASH REPORT-A/B."

Singapore Airlines (SIA) will further expand its code share portfolio to USA destinations with an expansion of its agreement with South Korea-based Asiana Airlines (AAR).

The new code shares will see Asiana (AAR) flying to Honolulu, Seattle, and Los Angeles with an SQ code, and linking to (SIA)’s Incheon flights. The flights will add to existing (AAR) code shares on flights between Singapore and Seoul, Jakarta, Perth, Auckland, and Cape Town.

The deal comes after the recent application to the USA Department of Transportation to add a bilateral agreement with a new partner: USA-based JetBlue Airways (JBL) to the (SIA) code share catalog. It builds on other recent agreements with Turkish Airlines (THY) and Air New Zealand (ANZ) to share capacity and extend (SIA)’s international connectivity deeper into traditional destination markets. New JetBlue (JBL)-operated destinations originating from (SIA)’s Singapore Changi base will include 16 destinations, including Austin, Boston, Chicago, Houston, Tampa, and Washington DC.

The JetBlue (JBL) agreement would see what Singapore Airlines (SIA) calls “seamless connections between the 2 airlines” across the North American region, pending regulatory approval. The new (JBL) code shares will operate from (SIA)’s connections at New York (JFK), and Asiana (AAR) through Seoul’s Incheon International.

The deal with JetBlue (JBL) signals (SIA)’s continued efforts to expand coverage, without exposing its fleet to additional and expensive long-haul commitments in the face of increased competition from Middle East carriers. “This [agreement] shows how we can achieve more by cooperating with the right partners,” (SIA) Executive VP Commercial, Mak Swee Wah said of the JetBlue (JBL) deal.

Asiana Airlines (AAR) continues to diverge from Korean Air (KAL), which cut capacity and grew revenue, while returning to the black. Not so for Asiana (AAR), which in 1st Quarter 2014 grew capacity but reported a -4.1% international yield decrease. While its situation improved, Asiana (AAR) remained in the red. Lack of stability in the Korea - China and Korea - Japan markets, large in overall size and yield, continue to impact Asiana (AAR).

Asiana (AAR) benefitted from reduced fuel costs, but unlike Korean Air (KAL) did not display large cost discipline in other areas of its business. Further changes do not paint a rosy picture as North Asia (Southeast Asia and North America) Asia competition increase. Asiana (AAR) wants to reduce its exposure to short-haul traffic, requiring growth in long-haul services as well as to Southeast Asia for transfer traffic. Incremental long-haul expansion is occurring to Istanbul, Paris and Seattle, while Asiana (AAR)'s recently-delivered A380 will help accelerate long-haul growth.

July 2014: Air Astana (AKZ) and Asiana Airlines (AAR) have signed a code share agreement on routes between Kazakhstan and Korea. (AKZ) passengers will use (AAR)’s network to Asia and North America, while (AAR) passengers will use (AKZ)’s network across Central Asia, (CIS), and Europe.

November 2014: Asiana (AAR) reported its 3rd quarter net profit down -84%, despite strong international demand. (AAR) saw its net profit dip significantly in the 3rd quarter despite strong international demand, with an unfavorable exchange rate partly to blame for the decline.

February 2015: News Item A-1: Asiana Airlines (AAR) has selected Airbus Flight Hour Services (FHS) to provide components support, securing the highest service level for daily A330 operations. This latest selection by (AAR) re-affirms its confidence in Airbus (EDS)’ Flight Hour Services, less than a year after signing an (FHS) contract for its A380s.

The (FHS) Components agreement, which will run for 10 years, provides an extensive scope of A330 line replaceable units (LRUs), guaranteed spare parts availability through pool access service, on-site stock at customer main base and selected outstations, as well as repair service to Asiana Airlines (AAR).

Airbus (FHS) contracts have now been selected to cover >170 aircraft from operators of A320, A330 and A380. Asiana Airlines is the 6th operator to have selected Airbus Flight Hour Services for the A330.

News Item A-2: Asiana Airlines (AAR) has signed a letter of intent (LOI) with Airbus (EDS) for the purchase of 25 A321neo single-aisle airplanes as part of its ongoing fleet modernization program. (AAR) will make an engine selection at a later date.

The new airplanes, which will seat 180 passengers in a 2-class layout, will be operated on (AAR)’s regional services, as well as on selected domestic routes.

The A321neo will join an existing fleet of A320 family airplanes operated by Asiana Airlines (AAR) and its low-cost subsidiary, Air Busan (ABN), with the A321 set to become the primary single-aisle type at both units.

Asiana (AAR) President & (CEO), Kim Soo Cheon said, “With the A321neo, we will be able to look forward to even greater levels of efficiency, with a -20% reduction in fuel consumption and increased flying range. The acquisition of the A321neo underscores our strategy to operate only the most modern and efficient airplanes that the industry has to offer.”

April 2015: INCDT: An Asiana Airlines (AAR) Airbus A320 hit a radio installation on approach to Hiroshima Mihara Airport in Japan, causing damage to a wing and engine and injuring 27 passengers as a result of the resulting final off-runway stop.

The A320, which was carrying 82 passengers and crew from Incheon, Seoul, was approaching in conditions local weather reports describe as “foggy and raining mildly.”

The A320 touched down partway down the runway, but swerved off and spun sideways some halfway through the landing sequence, ending just short of a drainage embankment. All passengers and crew escaped using emergency chutes.

Reports indicate the A320’s approach was off the edge of the runway, and as a result it hit a 20 ft high radio antenna array, part of which broke off and stuck into the left hand landing gear.

One passenger reported seeing fire and smoke coming out of an engine. The plane “rocked before landing and it bounced when it touched down,” according to another passenger.

Japanese officials said the airplane stabilizer had hit the runway while landing, and there was also significant damage to the left wing and engine.

As a result of the accident, the airport was closed, resulting in five other flights being diverted to other airports.

The Japan Transport Safety Board has sent 3 investigators to Hiroshima to liaise with 8 air safety officials from South Korea’s Ministry of Land, Infrastructure & Transport (MLIT). Asiana (AAR) has said it will send its own officials to investigate the incident.

(AAR) said there were 2 pilots (FC) on board. The senior pilot had logged a total of 8,233 hours and the co-pilot (FC) had logged a total of 1,583 hours.

According to the Flight Safety Foundation (FSF)'s Aviation Safety Network, the A320 was 7 years and 8 months old.

May 2015: News Item A-1: Korean airlines will face new and more stringent reporting requirements as part of a government drive to increase transparency in transport safety standards.

The move comes after a spate of incidents at Asiana Airlines (AAR), and the sinking of the Sewol ferry (both of which resulted in unfavorable reports on operational and safety systems).

“We expect the revision will force businesses to strengthen safety operations so that people can use their facilities more safely,” a Korean Fair Trade Commission (FTC) spokesperson said.

The new legislation, which will enable the imposition of up to $100 million won/$92,000 per offense, will require the disclosure of safety and certification test results, plus publicly accessible information on the manufacture, maintenance and inspection of any airplanes.

The regulations will also stipulate that airlines will be required to state the methods used for compensation if an accident does happen.
“Consumers can make more informed decisions, if they know what they [will] get with the services,” the (FTC) said.

News Item A-2: "Korean Transport Ministry is Pushing for Aircraft Age Limit" by Jeremy Torr, Air Transport World (ATW), May 22, 2015.

Korea’s Ministry of Land, Infrastructure, & Transport (MLIT) is urging all Korean airplane operators to replace or mothball all airplanes that are >2 decades old.

The (MLIT) said that 8 of the country’s carriers had signed a Memo of Understanding (MOU) in which they “voluntarily agreed to replace all their airplanes that are 20 years old or older.”

The move comes following a spate of airplane maintenance issues in the region.

In April, Japan and Korea suspended charter flights from Thailand following an (ICAO) inspection, and two air operator’s certificates (AOCs) in the Philippines were withdrawn recently following a European Aviation Safety Agency (EASA) audit.

To date, Korean Air (KAL), Asiana Airlines (AAR), Air Busan (ABN), Jeju Air (JJA), Jin Air (JIN), Air Incheon (ICH), Eastar Jet (EJS), and T’way Air (TWY) have all agreed to the 20-year ruling.

The (MLIT) said the agreement was part of Korea’s “ongoing efforts to improve on airline safety.” The (MLIT) said records indicate that of 264 airplanes in service this month, some 14 are (MLIT)’s new voluntary age limit. These are four Korean Air (KAL) Boeing 747-400s, Air Incheon (ICH) 737-400Fs, and Asiana (AAR) 767-300 and 747-400F cargo airplanes.

Korean Air (KAL)’s average airplane age is 9.89 years; No 2 carrier, Asiana Airlines (AAR), has an average airplane age of 8.47 years, according to the Ministry.

Compared to the USA, Korean fleets are mere toddlers, the (MLIT) said, citing Delta Air Lines (DAL)’s fleet that has 234 airplanes 20+ years old, and American Airlines (AAL)’s fleet, which has 233+ airplanes of that age or more.

Although the (MLIT) noted that “there currently is no limit on the age or lifespan of an airplane,” it said the move would help improve both overall safety and efficiency.

Following a Middle East Respiratory Syndrome (MERS) Red Alert warning by the Hong Kong government, warning travelers against flying to Korea, Cathay Pacific Airways (CAT) and its subsidiary, Dragonair (DRG) have committed to refunds or re-routing for all existing tickets to Seoul, Busan and Jeju up to the end of August.

Korea has reported 95 cases of (MERS), with seven deaths in the country. As a result, the Hong Kong Security Bureau issued an Outbound Travel Alert (OTA), advising passengers to avoid “all non-essential travel” to the country.

In addition, Taiwan and Macau have both advised against unnecessary travel to any destination in South Korea, and are mandating that passengers wear facemasks disembarking from Korea-originating flights.

Since the virus was discovered in 2012 in Saudi Arabia, the (MERS) outbreak has killed >300 people in >20 countries. First identified in Saudi Arabia where it claimed the lives of >100, (MERS) is suspected of being spread by respiratory and direct contact vectors.

Cathay Pacific (CAT) and (DRG) say they are “monitoring the situation closely” and have provided extra facemasks, hand sanitizers and gloves for use on any airplanes traveling to Korea. Both carriers are looking at extra sanitation procedures in addition to routine cleaning on airplanes flying to potential infection areas.

Authorities in South Korea temporarily closed two hospitals amid persistent fears about the Middle East Respiratory Syndrome (MERS) outbreak, which had killed 14 people through June 13th. Twelve new infections also were reported, the Health Ministry said. Nearly 140 people in the nation have been diagnosed with (MERS) since the country reported its first case last month.

News Item A-2: Asiana Airlines (AAR) has expanded its presence in Europe with the launch of a 5th destination. On June 30, (AAR), the Star (SAL) Alliance carrier launched 3x-weekly flights on the 8,961 km route from Seoul Incheon (ICN) to Rome Fiumicino (FCO). The service is operated by (AAR)’s 777-200s. Competition on the route comes from Alitalia (ALI) and Korean Air (KAL), who both also operate 3x-weekly. (AAR) becomes the latest Asian carrier to serve the Italian capital, following the likes of Air China (BEJ), Air India (AIN), Cathay Pacific Airways (CAT), China Airlines (CHI), China Eastern Airlines (CEA), Hainan Airlines (HNA), Korean Air (KAL), Singapore Airlines (SIA), SriLankan Airlines (LNK) and Thai Airways (TII).

July 2015: Asiana Airlines (AAR) shelves new Low Cost Carrier (LCC) plans for the time being.

(AAR) said the results were due to “passenger business in the 2nd quarter [being] much affected by Middle East Respiratory Syndrome (MERS), 1st confirmed in May. That caused a spike in the number of cancellations of trips by Chinese and Japanese tourists.” The (MERS) outbreak is estimated to have brought a -80% drop in international tourist bookings to Korea, worth >$90 million in travel sales.

(AAR)’s 2nd-quarter revenue was down -8% to KRW1.3 trillion from KRW1.4 trillion, resulting in an operating loss of -KRW 61.4 billion, reversed from an operating profit of +KRW3 billion a year ago.

Passenger revenue also fell -7.7% from the corresponding period in 2014, while cargo revenue fell -13.5%. (AAR) attributed poor cargo sales mainly to a slump in European business.

In the 1st half, (AAR) reported a net loss of -KRW25.8 billion, narrowed from a 2014 1st-half net loss of -KRW 58.3 billion.

(AAR) recently committed to a 25-strong $2.83 billion A320neo order from Airbus, to be used to expand its domestic network.

News Item A-2: Asiana Airlines (AAR) on August 8 introduced a weekly (Saturday) service on the 4,511 km sector between Seoul Incheon (ICN) and Astana (TSE), the capital of Kazakhstan. (AAR)’s A330-300s are used to operate the route. The city pair is already served weekly (on Tuesdays) by Air Astana (AKZ), with whom (AAR) has a code share agreement on this route. (AAR) already serves the former Kazakhstan capital of Almaty with 2x-weekly flights.

September 2015: "T’way Air (TWY) Extends Services to North America"
by (ATW) Jeremy Torr, September 2015.

Korea’s longest established low-cost carrier (LCC) T’way Air (TWY) has been granted a Foreign Air Carrier Permit (FACP) by the USA Department of Transportation. This will allow (TWY) to extend its current regional passenger services to North American destinations, as well as provide cargo capacity on the same routes.

With (LCC) carriers now taking some 50% of all passenger traffic in Korea, regional (LCC) operators are looking overseas for continued growth.

Initially, T'way (TWY) will run a daily Boeing 737-800 schedule from Incheon, Seoul to USA Protectorate Guam’s Antonio B Won Pat International Airport, starting late September. In October, (TWY) will introduce a 3x-week service from Daegu International to Guam, via Osaka Kansia International.

The move to North America for T’way (TWY) comes on the heels of the imminent arrival of (AAR)’s new (LCC) subsidiary Seoul Air (SEO), which will compete directly with (TWY) on its established Korea - Japan regional routes.

More importantly, (TWY) will now be able to fly charter services to other mainland USA territories and cities, opening up the possibility of direct competition with Asiana (AAR) on routes to its mainland destinations such as San Francisco, New York, Seattle, and Chicago.

Three other Korean (LCC)s currently offer Korea to Guam services (Jin Air (JIN), Jeju Air (JJA), and Air Busan (ABN)) even before Seoul Air (SEO) takes to the skies. This reinforces T’way Air (TWY)’s recent commitment to change strategy outside its regional niches to continue expanding.

Asiana Airlines (AAR) has placed a firm order with Airbus (EDS) for 25 A321neo aircraft. The contract, which finalizes a commitment announced earlier this year, was signed at a special ceremony in Seoul by Kim Soo Cheon President & (CEO) Asiana Airlines (AAR) and Fabrice Brégier Airbus President & (CEO).

Seating 180 passengers in a 2 class layout, the new aircraft will be operated on (AAR)’s regional services, as well as on selected domestic routes. (AAR) will make a decision on its engine of choice for the aircraft at a later date. The A321neo will join an existing fleet of A320 Family aircraft operated by (AAR) and its low cost carrier (LCC) subsidiary, Air Busan (ABN), with the A321 set to become the primary single aisle type at both units.

“The finalization of our latest order with (EDS) will ensure that we will continue to operate the most efficient aircraft the industry has to offer in all size categories,” said Kim Soo Cheon President & (CEO) Asiana Airlines. “The A321neo will bring a -20% reduction in fuel consumption and increased flying range. And for our passengers the aircraft will enable us to offer the very highest standards of service and comfort on even our shortest routes.”

The A321 is the largest member of the best-selling single aisle A320 Family. To date, the A320 Family has won >12,200 orders and >6,700 aircraft have been delivered to >300 operators worldwide.

Incorporating new engines and the latest technologies, the A320neo Family will bring a step-change reduction in fuel consumption of >15%, longer range capability and reduced maintenance costs, as well significantly reduced carbon emissions. With >4,300 orders received from >75 customers since its launch in 2010, the A320neo Family has captured almost 60% share of the market.

Korean Air (KAL) and Asiana Airlines (AAR) are struggling to retain their pilots (FC), who are being tempted by higher salaries and better incentives offered by Chinese rivals.

The increasing exodus of local pilots (FC) could pose a threat to aviation safety at South Korea’s 2 flagship carriers, with a growing number of airplanes being flown by inexperienced aviators.

Korean Air (KAL) and (AAR) say there isn’t much they can do about the growing exodus, because they are not in a position to improve working conditions for pilots (FC) amid worsening bottom lines.

“China’s aviation market has been expanding at a swift pace over the past few years,” said an airline industry analyst, on condition of anonymity. “This means that Chinese carriers need more pilots (FC) capable of flying commercial jets, but there aren’t many experienced aviators in the world’s second-largest economy.”

The shortage of seasoned Chinese pilots (FC) has forced mainland carriers to recruit foreign pilots (FC), and those flying with (KAL) and (AAR) have become their main target.

“A pilot (FC) with 15 years of flight experience at Korean Air (KAL) receives about 150 million won a year. But many Chinese carriers reportedly offer twice as much, on top of free housing and education subsidies for their children,” the analyst said. “Lured by fat paychecks and attractive benefits, an increasing number of Korean pilots (FC) have moved to China.”

Given that it normally takes many years to train a pilot (FC), Chinese airlines will likely accelerate the recruiting of experienced Korean pilots (FC) in the coming years amid the mainland’s rapidly expanding aviation market.

In 2015, a total of 46 Korean Air (KAL) pilots (FC) quit to work for Chinese carriers, up from 2 in 2014 and 7 in 2013, according to airline industry data.

61 pilots (FC) quit Asiana Airlines (AAR) last year to move to carriers based in China and other foreign countries, up from 31 in 2014 and 28 in 2013.

The flagship carriers have also seen an increasing number of junior pilots (FC) move to low-cost carriers (LCC).

“Pilots (FC) at budget carriers get paid less than those at flagship carriers, but they can become captains (FC) within 4 years, while it takes about 10 years at Korean Air (KAL) and (AAR),” the analyst said. “When they become captains (FC), they can move to foreign carriers and receive more pay. So to advance their careers more quickly, some junior pilots (FC) prefer to work at budget airlines.”

Desperate to fill the void (KAL), headed by President, Chi Chang-hoon, has been taking all possible measures to retain pilots (FC) but to no avail. To fill the void, (KAL) has hired more foreign pilots (FC), in addition to retired Air Force pilots and those graduating from training schools at home and abroad.

The company recruited a total of 77 non-Korean aviators last year, up from 50 in 2014.

“We are not the only carrier hit by the pilot (FC) exodus. All major carriers around the world are grappling with the same problem,” a (KAL) spokesman said. “We are recruiting experienced and talented pilots (FC) through various channels to replace those who are leaving. We are doing everything we can to maintain an ample number of qualified aviators.”

(KAL) has been recruiting personnel who have completed the “Airline Pilot Program” at Korea Aerospace University in Goyang, Gyeonggi Province.

July 2017: (CFM) unveiled (LEAP-1A) engine orders at the Farnborough Air Show to power 164 A320neo family aircraft: Seoul-based Asiana Airlines (AAR) selected (LEAP-1A)s to power 25 A321neos; (TAP) Portugal ordered 83 (LEAP-1A)s to power 15 A320neos and 24 A321neos; and Malaysia’s AirAsia (ASW) ordered 200 (LEAP-1A)s to power 100 A321neos.

(AAR) was helped by favorable year-on-year comparisons because of last year’s concerns over Middle East Respiratory Syndrome, which affected demand on Chinese and Japanese routes. This year, international demand was up on most routes. Asiana (AAR) said the elimination of fuel surcharges “helped push up demand for outbound flights.”

Asiana (AAR) achieved a 9-month net profit of +KRW170.4 billion, reversing a loss of -KRW87.9 billion in the same period last year. Revenue rose +3.9% for the 9-month period.

(AAR) said it improved its financial stability through debt reduction after selling a 100% stake in the Kumho Terminal express bus company and a 50% stake in a major real estate complex in Ho Chi Minh City.

December 2016: A321-131 (802, HL7767) returned to lessor, re-registered as (2-TBXU).

April 2017: News Item A-1: Hong Kong Airlines (CRY) and Asiana Airlines (AAR) entered into code share partnership to bring more flight options to passengers traveling between Hong Kong and Seoul, the capital city of Korea.

Under the agreement, (CRY) and (AAR) place their respective marketing codes on each other's flights between Hong Kong and Seoul. The partnership allows customers of both (CRY) and (AAR) to choose from a total of 5x-daily flights when they travel between the 2 Asian key business cities.

Mr Li Dianchun, Chief Commercial Officer (CCO) Hong Kong Airlines said: "We launched the daily flight service from Hong Kong to Seoul last December, which was our 1st route to Korea. From then, we have been actively exploring ways to improve schedule options on this route. We are very happy to establish code sharing partnership with Asiana Airlines (AAR), one of the world's best airlines. By connecting the hubs of the 2 airlines, the code share does not only benefit customers

"By connecting the hubs of the 2 airlines, the code share does not only benefit customers traveling between Hong Kong and Seoul, it also allows customers to seamlessly transfer when they travel on an itinerary to or from other destinations that includes flights operated by both carriers."

News Item A-3: Asiana Airlines (AAR) took delivery of its 1st Airbus A350-900 (HL8078) April 24 in Toulouse, which is on lease from Dublin-based (SMBC) Aviation Capital. The aircraft is the 1st of the type to be operated by a Korean airline. (AAR) has ordered 30 A350s and will initially operate the aircraft on flights from Seoul to Hong Kong and Manila beginning in May. The A350 is configured in a 3-class layout with 311 seats, comprising 36 premium-economy, 28 business- and 247 economy-class seats.